The current price of a non-dividend-paying stock is $80. Over the next year it is expected to rise to $82 or fall to $77

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answerhappygod
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The current price of a non-dividend-paying stock is $80. Over the next year it is expected to rise to $82 or fall to $77

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The current price of a non-dividend-paying stock is $80. Over
the next year it is expected to rise to $82 or fall to $77. An
investor buys put options with a strike price of $81.
What is the value of each option? The risk-free interest rate is
2% per annum with continuous compounding.
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