You are attempting to value a put option with an exercise price of $107 and one year to expiration. The underlying stock pays no dividends, its current price is $107, and you believe it has a 50% chance of increasing to $125 and a 50% chance of decreasing to $89. The risk-free rate of interest is 5%. Calculate the value of a put option with exercise price $107. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Value of a put option 8.57 x $

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.