Multiple Choice
Suppose a stock is currently trading for $23,and in one period it will either increase to $30 or decrease to $20.If the one-period risk-free rate is 5%,what is the price of a European put option that expires in one period and has an exercise price of $25?
A) $2.79
B) $2.50
C) $2.38
D) $2.21
E) $2.66
Correct Answer:
Verified
Correct Answer:
Verified
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