Determine price of put option with same exercise price

Assignment Help Financial Management

Reference no: EM13914967

Answer must be A, B, or C to be correct. Please explain. Thank you.

Given the following parameters use put-call parity to determine the price of a put option with the same exercise price.

Current stock price: $48.00

Call option exercise price: $50.00

Sales price of call options: $3.80

Months until expiration of call options: 3

Risk free rate: 2.6 percent

Compounding: continuous

A) Price of put option = $4.52

B) Price of put option = $6.13

C) Price of put option = $5.48

Reference no: EM13914967

Questions Cloud

Record each of the following zeke company events : Record each of the following Zeke Co. events in T-accounts, and then explain how the event affects the accounting equation:

Responsibilities of a critical thinker : The Final Research Project will present research relating the responsibilities of a critical thinker to contemporary society. In this assignment, you will do the following:

Discuss the role of the governor : Additionally, compare your State's Constitution to one other State's Constitution and discuss whether your State Constitution gives your Governor more or less power than the other State's Governor used in your comparison.

Print versus online advertising : Electronic commerce is a major part of individual's everyday lives. Many choices exist through the Internet, such as retail outlets, countless sources of information, social sites, forums, and many more avenues that can save time and effort.

Determine price of put option with same exercise price : Given the following parameters use put-call parity to determine the price of a put option with the same exercise price.

Cash flows from financing : A company had average total assets of $1,860,000, total cash flows of $1,440,000, cash flows from operations of $235,000, and cash flows from financing of $810,000. The cash flow on total assets ratio equals

Writing analysis and development plan : Graduate-Level Writing Analysis and Development Plan Review the required readings for this week, along with the feedback you received on your Week One, Week Two, and Week Four Individual Assignments.

Social media tools in e-commerce : Social media defines itself as a set of interactive tools that assists in connecting people and encourages small businesses in using these tools for relationships and engagement with vendors, customers, community, and peers. Social media also help..

Managed care in the united states : In the United States, managed care is becoming an increasingly popular method of administering healthcare. It influences the clinical behavior of providers, as it combines the payment and delivery of healthcare into a single system, the purpose of..

User Account

All Pages