The Current Price of a Stock Is $50

question 9

Multiple Choice

The current price of a stock is $50.Every month,the stock price will rise by a factor of 1.2 or fall by a factor of 0.8;and a $1 risk-free investment will be worth $1.03.A dividend as a proportion 0.01 of the stock price is paid each period.What is the price of a six-month American put option at a strike of $51?

• A)$7.51
• B)$7.91
• C)$8.11
• D)$8.51

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