Consider a Put Option with a Strike Price of $40

question 52

Multiple Choice

Consider a put option with a strike price of $40, which expires in one year. The risk-free rate of interest is 8 percent. The current underlying stock price is $20. Without arbitrage, which of the following is a possible price for the put option? (Round intermediate computations to two decimal places.)

• A) $0.50
• B) $16.20
• C) $25.00
• D) $10.20

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Definitions:

Chloroplast

Organelle of photosynthesis in plants and photosynthetic protists. Light-dependent reactions occur at its inner thylakoid membrane; light-independent reactions, in the stroma.

Thylakoid Membrane

A membrane-bound structure within chloroplasts that contains chlorophyll, where the light-dependent reactions of photosynthesis occur.

Photosystems I and II

Components of the photosynthetic process in plants and algae, capturing light energy for ATP and NADPH production.

Thylakoid Membrane

A compartment enclosed by a membrane within chloroplasts and cyanobacteria, where light-dependent photosynthesis reactions take place.