46. Information about a stock is given in the table below. Current stock price 33 Option exercise price 30 Annual dividend rate 0% Annual risk-free rate, continuously compounded 4% Annual volatility 25% what is the correct price for a 6-month European put option?
Added by Olu A.
Step 1
First, we need to calculate the present value of the exercise price. We can use the formula: PV(X) = X * e^(-rT) where PV(X) is the present value of the exercise price, X is the exercise price, r is the annual risk-free rate, and T is the time to expiration in Show more…
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