What should be the value of the put

Assignment Help Financial Management

Reference no: EM13725549

A put option on a stock with a current price of $36 has an exercise price of $38. The price of the corresponding call option is $2.70. According to put-call parity, if the effective annual risk-free rate of interest is 6% and there are four months until expiration, what should be the value of the put? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Value of the put $ =

Reference no: EM13725549

Questions Cloud

Understand cumulative voting and plans to cast : Mr. Michaels controls proxies for 40,000 of the 75,000 outstanding shares of Northern Airlines. Mr. Baker heads a dissident group that controls the remaining 35,000 shares. There are seven board members to be elected and cumulative voting rules apply..

How would you define this segment : Is there a segment of the baby boomers who are more conservative and not interested in buying products that speak to a younger living lifestyle as portrayed in this case study? If so, how would you define this segment and what potential would ther..

What interest rate was paid on the construction bonds : The Golden Gate Bridge in San Francisco was financed with construction bonds sold for $34 million in 1931. These were 40-year bonds, and the $34 million principal plus almost $38 million in interest were repaid in total in 1971. Assume the constructi..

Developed a continuous variable transmission : A large automobile manufacturer has developed a continuous variable transmission (CVT) that provides smooth shifting and enhances fuel efficiency by 3 mpg of gasoline. The extra cost of a CVT is $850 on the sticker price of a new car.

What should be the value of the put : A put option on a stock with a current price of $36 has an exercise price of $38. The price of the corresponding call option is $2.70. According to put-call parity, if the effective annual risk-free rate of interest is 6% and there are four months un..

Write the term paper on bmw car marketing project : Write the term paper on marketing project and the topic is BMW car

The hedge ratio of an at-the-money call option on ibm : The hedge ratio of an at-the-money call option on IBM is 0.17. The hedge ratio of an at-the-money put option is ?0.54. What is the hedge ratio of an at-the-money straddle position on IBM? (Negative value should be indicated by a minus sign. Round you..

Network security policy plan : Explain why you believe these are important, and include examples of security breaches that can occur if these items are not outlined and followed.

Shares outstanding-what is the price per share : Cool Shoes (CS) had 2014 sales of $518 million. You expect sales to grow at 9% next year(2015), but, decline by 1% per year after until you settle to a long -run growth rate of 4%. You expect EBIT to be 9% of sales, increases in net working capital r..

User Account

All Pages