The current price of a stock is $ 52.07 and the annual risk-free rate is 3.7 percent. A put option with an exercise price of $55 and one year until expiration has a current value of $2.68. What is the value of a call option written on the stock with the same exercise price and expiration date as the put option? Show your answer to the nearest .01. Do not use $ or, in your answer. Because of the limitations of our LMS random numbers, some of the options may be trading below their intrinsic value or even below $0. If you compute a negative number, be sure to use the sign. Note, the given interest rate is an effective rate, so for calculation purposes, you need only discount the using the risk free rate, no e x adjustment is needed. Your Answer:

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter5: Financial Options
Section: Chapter Questions
Problem 1P
Question

Subject:- finance 

The current price of a stock is $ 52.07 and the annual risk-free rate is 3.7 percent. A
put option with an exercise price of $55 and one year until expiration has a current
value of $2.68. What is the value of a call option written on the stock with the same
exercise price and expiration date as the put option? Show your answer to the
nearest .01. Do not use $ or, in your answer. Because of the limitations of our LMS
random numbers, some of the options may be trading below their intrinsic value or
even below $0. If you compute a negative number, be sure to use the sign. Note,
the given interest rate is an effective rate, so for calculation purposes, you need only
discount the using the risk free rate, no e x adjustment is needed.
Your Answer:
Answer
Transcribed Image Text:The current price of a stock is $ 52.07 and the annual risk-free rate is 3.7 percent. A put option with an exercise price of $55 and one year until expiration has a current value of $2.68. What is the value of a call option written on the stock with the same exercise price and expiration date as the put option? Show your answer to the nearest .01. Do not use $ or, in your answer. Because of the limitations of our LMS random numbers, some of the options may be trading below their intrinsic value or even below $0. If you compute a negative number, be sure to use the sign. Note, the given interest rate is an effective rate, so for calculation purposes, you need only discount the using the risk free rate, no e x adjustment is needed. Your Answer: Answer
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