The Current Stock Price of Howard & Howard Is $64

question 41

Multiple Choice

The current stock price of Howard & Howard is $64, and the stock does not pay dividends. The instantaneous risk-free rate of return is 5%. The instantaneous standard deviation of H&H's stock is 20%. You want to purchase a put option on this stock with an exercise price of $55 and an expiration date 73 days from now.
Using Black-Scholes, the put option should be worth ________ today.

• A) $0.01
• B) $0.07
• C) $9.26
• D) $9.62

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