Assume That the Stock of TuneSeis, Inc

question 62

Multiple Choice

Assume that the stock of TuneSeis, Inc. is currently trading for $29 and will either rise to $32 or fall to $5 in one year. The risk-free rate for one year is 2 percent. What is the value of a put option with a strike price of $30? (Do not round intermediate computations. Round final answer to two decimal places.)

• A) $0
• B) $0.41
• C) $1.78
• D) $2.20

---

Definitions:

Treaty

A formal and binding agreement between two or more sovereign nations or international organizations, governed by international law.

Non-binding Agreement

An agreement between parties that does not legally enforce compliance but is made to signify a mutual understanding or intention.

Case Law

Law established by previous court decisions and based on interpretations of statutes, legal principles, and precedents rather than statutes alone.

Statutory Law

Written laws passed by a legislative body at the federal, state, or municipal level, codified and enforceable by government authorities.