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You own a lot in Key West, Florida, that is currently unused. Similar lots have recently...

You own a lot in Key West, Florida, that is currently unused. Similar lots have recently sold for $1,390,000 million. Over the past five years, the price of land in the area has increased 5 percent per year, with an annual standard deviation of 26 percent. You would like an option to sell the land in the next 12 months for $1,540,000. The risk-free rate of interest is 3 percent per year, compounded continuously.

What is the price of the put option?

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jeff jeffy answered 1 week ago
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