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Strike price options that currently cost

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Use the concept of put-call parity to answer the following:

a. A stock trades for $42 and has a put that expires in one year with a $40 strike price which trades at $4.50. If the risk free rate is 4%, what is the current value of a $40 call with a one year expiration?

b. A stock has one year, $130 strike price options that currently cost $6.13 for calls and $7.84 for puts. If the risk free rate is 5%, what is the current price of the stock?

Reference no: EM132355695

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