A Stock Is Currently Selling for $40

question 100

Multiple Choice

A stock is currently selling for $40.85.A 3-month call option with a strike price of $40 has an option premium of $1.30.The risk-free rate is 2 percent and the market rate is 9.5 percent.What is the option premium on a 3-month put with a $40 strike price? Assume the options are European style.

• A)$0.00
• B)$0.05
• C)$0.15
• D)$0.25
• E)$0.35

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