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What is the value of a put option with strike price 45 and

IBM stock currently sells for 44 dollars per share. Over 5 months the price will either go up by 13.5 percent or down by -6.5 percent. The risk-free rate of interest is 7.0 percent continuously compounded. What is the value of a put option with strike price 45 and maturity of 5 months?

a. 2.0945
b. 1.7732
c. 0.47298
d. 1.4335
e. 1.9758

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Finance Basics: What is the value of a put option with strike price 45 and

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