You have the following information on six-month European options based on a common underlying stock: Call options: $70.00 strike options trade at $9.71. $72.50 strike options trade at $8.30. • $75.00 strike options trade at $6.98. ● Put options: • $75.00 strike options trade at $13.55. • $77.50 strike options trade at $15.58. • $80.00 strike options trade at $17.77. If the continuously compounded risk free rate is 5.30%, what does put call parity suggest is the current stock price? Report your answer without a dollar sign to four decimal places.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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You have the following information on six-month European options based on a
common underlying stock:
Call options:
$70.00 strike options trade at $9.71.
$72.50 strike options trade at $8.30.
• $75.00 strike options trade at $6.98.
●
Put options:
• $75.00 strike options trade at $13.55.
• $77.50 strike options trade at $15.58.
• $80.00 strike options trade at $17.77.
If the continuously compounded risk free rate is 5.30%, what does put call parity
suggest is the current stock price?
Report your answer without a dollar sign to four decimal places.
Transcribed Image Text:You have the following information on six-month European options based on a common underlying stock: Call options: $70.00 strike options trade at $9.71. $72.50 strike options trade at $8.30. • $75.00 strike options trade at $6.98. ● Put options: • $75.00 strike options trade at $13.55. • $77.50 strike options trade at $15.58. • $80.00 strike options trade at $17.77. If the continuously compounded risk free rate is 5.30%, what does put call parity suggest is the current stock price? Report your answer without a dollar sign to four decimal places.
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