A European put option on ENRON stock has a strike price $55.0 and matures in 9.0 months. The continuously compounded risk-free rate is 7.0 percent per year. If the price of ENRON stock goes to zero, what is the value of the put option

the value of the put option is $52.18

Explanation:

The computation of the value of the put option is shown below:

Given that

Strike price = $55

Maturity (t) = 9 months or 0.75 per year

Risk free rate (r) = 7.0% or 0.07

Based on the above information

Value of the put option = Strike price × e^-(r)(t)

= $55 × e^-(0.07)(0.75)

= $55 × e^-0.0525

= $52.18

Hence, the value of the put option is $52.18

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi

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