What is the discounted expected sale price assuming the put

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Use excel to answer the following questions. Consider the following environment:

the current spot price of an asset is $50,

the annualized volatility is 11.5%, and

the interest rate is 3% per year

Consider a one-year put with a strike of $55.

a. What is the discounted expected sale price assuming the put is exercised optimally?

b. What is the discounted expected purchase price assuming the put is exercised optimally?

c. What is the premium of this put based on the previous two questions?

Reference no: EM131326861

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