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Compute the price of the call

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Rebecca is interested in purchasing a European call on a hot new? stock, Up, Inc. The call has a strike price of $ 97.00 and expires in 86 days. The current price of Up stock is $ 123.81, and the stock has a standard deviation of 38 % per year. The? risk-free interest rate is 6.55% per year. Up stock pays no dividends. Use a? 365-day year.

a. Using the? Black-Scholes formula, compute the price of the call.

b. Use? put-call parity to compute the price of the put with the same strike and expiration date.

?(Note?: Make sure to round all intermediate calculations to at least five decimal places.?)

Reference no: EM132406964

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