Use the Following Information to Answer the Question(s)below

Use the following information to answer the question(s) below.
Consider an American put option on Rearden Metal stock with a strike price of $60 and one year to expiration.Assume that Rearden pays no dividends,its stock is currently trading at $15 per share,and the one-year interest rate is 5%.Also assume that it is optimal to exercise this put option early.
-The price of a one-year American put option on Rearden Metal with a strike price of $70 per share is closest to:

A) $45.
B) $50.
C) $55.
D) $60.

Correct Answer:

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