You Would Like to Be Holding a Protective Put Position

Multiple Choice

You would like to be holding a protective put position on the stock of Avalon Corporation to lock in a guaranteed minimum value of $50 at year-end. Avalon currently sells for $50. Over the next year, the stock price will increase by 10% or decrease by 10%. The T-bill rate is 5%. Unfortunately, no put options are traded on Avalon Co.
-Suppose the desired put options with X = 50 were traded.How much would it cost to purchase?

A) $1.19
B) $2.38
C) $5.00
D) $3.33