A Put Option Has a Price of $1 $0$

question 1

Multiple Choice

A put option has a price of $1.50,with exercise price of $14.00 and underlying asset price of $12.00.If the time to maturity is 30 days and the risk-free return is 7% p.a. ,what is the pricing bounds error?

• A) \( 0\)
• B) \( 0.42 \)
• C) \( 1.67 \)
• D) \( 2.50 \)

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Definitions:

Endocrine System

A network of glands in the body that secretes hormones directly into the circulatory system to regulate the body's functions.

Sympathetic Nervous System

A part of the autonomic nervous system responsible for the body's 'fight or flight' response, increasing heart rate and blood flow to muscles during stressful situations.

Self-Efficacy

An individual's belief in their own capability to execute behaviors necessary to produce specific performance attainments.

Desired Changes

Refers to the positive modifications or alterations individuals seek to make in their personal or professional lives.