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A Stock Is Currently Selling for $40

Question 100

Multiple Choice

A stock is currently selling for $40.85.A 3-month call option with a strike price of $40 has an option premium of $1.30.The risk-free rate is 2 percent and the market rate is 9.5 percent.What is the option premium on a 3-month put with a $40 strike price? Assume the options are European style.


A) $0.00
B) $0.05
C) $0.15
D) $0.25
E) $0.35

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