What is the put option premium given the following information?
$\begin{array}{lr}
\text { Time (years) } & .5 \
\text { Strike price } & \$ 25.00 \
\text { Stock price } & \$ 24.50 \
\text { Risk-free rate } & 2.00\% \
\text { Volatility } & 30\%
\end{array}$
A)$1.20
B)$1.54
C)$1.82
D)$2.01
E)$2.21

Question

Quizplus · Accepted Answer

To calculate the put option premium, the Black-Scholes model can be used, which requires inputs like the time to expiration, strike price, stock price, risk-free rate, and volatility. Given the complexity and the need for a financial calculator or software to accurately compute the premium, the exact calculation steps are not provided here. However, based on the given inputs, the correct answer is the put option premium closest to the value that would be derived from such a calculation, which is $2.21.

What Is the Put Option Premium Given the Following Information