Use the Following Information to Answer the Question(s)below

question 28

Multiple Choice

Use the following information to answer the question(s) below.
(Please use a copy of the Cumulative Probabilities for the standard normal distribution for these problems. )
Taggart Transcontinental's stock has a volatility of 25% and a current stock price of $40 per share.Taggart pays no dividends.The risk-free interest rate is 4%.
-The Black-Scholes value of a one-year European put option on Taggart stock with a strike price of $50 is closest to:

• A)$1.45.
• B)$3.15.
• C)$4.75.
• D)$9.50.

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Definitions:

Extended Problem Solving

A consumer decision-making process used in complex buying situations, involving detailed search and evaluation.

College Graduation

A formal ceremony where students receive their academic degrees, marking the completion of their studies.

Routine Problem Solving

Routine problem solving involves addressing and resolving common or regularly occurring issues using established methods or procedures.

Low-involvement Decision Making

A consumer behavior characterized by limited research and consideration because the product is perceived as low risk.