ABX Corporation Is Currently Trading for $45 Per Share

question 81

Multiple Choice

ABX corporation is currently trading for $45 per share.The stock will pay a one-time dividend of $2.25 in exactly 3 months.A one-year European call option on ABX with a strike price of $50 is currently trading for $2.40.If the risk-free interest rate is 9% per year,then the price of a one-year European put option on ABX with a strike price of $50 will be closest to:

• A)$3.73
• B)$5.47
• C)$0.88
• D)$5.52
• E)$1.07

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