The price of a European call option on a non-dividend-paying stock with a strike price of $52 is $4. The stock price is $51, the continuously compounded risk-free rate (all maturities) is 6% and the time to maturity is one year. What is the price of a one-year European put option on the stock with a strike price of $52? a. $2.17 b. $2.05 c. $2.09 d. $1.97
The price of a European call option on a non-dividend-paying stock with a strike price of $52 is $4. The stock price is $51, the continuously compounded risk-free rate (all maturities) is 6% and the time to maturity is one year. What is the price of a one-year European put option on the stock with a strike price of $52? a. $2.17 b. $2.05 c. $2.09 d. $1.97
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
Section: Chapter Questions
Problem 1PS
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The price of a European call option on a non-dividend-paying stock with a strike price of $52 is $4. The stock price is $51, the continuously compounded risk-free rate (all maturities) is 6% and the time to maturity is one year. What is the price of a one-year European put option on the stock with a strike price of $52?
a.
$2.17
b.
$2.05
c.
$2.09
d.
$1.97
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