What is the value of the synthetic put

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Reference no: EM131596556

Consider a put and a call, both on the same underlying stock that has present price of $53. Both options have the same identical strike price of $50 and time-to-expiration of 215 days. Assume that there are no dividends expected for the coming year on the stock, the options are all European, and the interest rate is 10%. If the put premium is $3.00 and the call premium is $8.00, what is the value of the synthetic put?

a. $2.27

$b. 2.30

c. $3.00

d. $4.27

e. $5.30

Reference no: EM131596556

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