Use the information below to answer the following question.
You own a lot in Key West, Florida, that you are considering selling. Similar lots have recently sold for $1.2 million. Over the past five years, the price of land in the area has varied with a standard deviation of 19 percent. A potential buyer wants an option to buy the land in the next 9 months for $1,310,000. The risk-free rate of interest is 7 percent per year, compounded continuously. How much should you charge for the option? Round your answer to the nearest $100.
A) $62,000
B) $68,900
C) $63,700
D) $62,500
E) $60,400

Question

Use the information below to answer the following question. 
You own a lot in Key West, Florida, that you are considering selling. Similar lots have recently sold for $1.2 million. Over the past five years, the price of land in the area has varied with a standard deviation of 19 percent. A potential buyer wants an option to buy the land in the next 9 months for $1,310,000. The risk-free rate of interest is 7 percent per year, compounded continuously. How much should you charge for the option? Round your answer to the nearest $100.
A) $62,000 
B) $68,900 
C) $63,700 
D) $62,500 
E) $60,400

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The Answer of Use the information below to answer the following question. 
You own a lot in Key West, Florida, that you are considering selling. Similar lots have recently sold for $1.2 million. Over the past five years, the price of land in the area has varied with a standard deviation of 19 percent. A potential buyer wants an option to buy the land in the next 9 months for $1,310,000. The risk-free rate of interest is 7 percent per year, compounded continuously. How much should you charge for the option? Round your answer to the nearest $100.
A) $62,000 
B) $68,900 
C) $63,700 
D) $62,500 
E) $60,400

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