What Is the Put Option Premium Given the Following Information

question 36

Multiple Choice

What is the put option premium given the following information?

• A)$3.62
• B)$4.23
• C)$4.47
• D)$4.89
• E)$5.01

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Definitions:

Uniform Random Variable

Represents a variable that has a uniform distribution over a certain interval, meaning each value within the interval is equally likely to occur.

Probability Density Function

A function that describes the relative likelihood for a continuous random variable to occur at a point in the possible range of values.

Uniform Random Variable

A type of continuous random variable where all intervals of the same length have an equal probability of occurring.

Continuous Random Variable

A variable capable of assuming any value out of countless possibilities within a specified interval.