The Current Stock Price of National Paper Is $69, and the Stock

question 65

Multiple Choice

The current stock price of National Paper is $69, and the stock does not pay dividends. The instantaneous risk-free rate of return is 10%. The instantaneous standard deviation of National Paper's stock is 25%. You want to purchase a put option on this stock with an exercise price of $70 and an expiration date 73 days from now.
Using the Black-Scholes, the put option should be worth ________ today.

• A) $1.50
• B) $2.88
• C) $2.55
• D) $3.00

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Definitions:

Densely Populated

Referring to areas that have a high number of residents or entities in a small geographical space.

Atonement Suicide

The act of taking one's own life as a means of making amends or seeking forgiveness for real or perceived offenses.

Felony Suicide

A term describing an act where an individual commits a serious crime, such as a felony, with the intention of provoking law enforcement to kill them, effectively committing suicide by cop.

Double Suicide

the act of two people committing suicide together, often partners or close friends, usually as a result of a shared pact or mutual agreement.