Today a stock is $100, and a call option on this stock with a year to expiration and a $120 strike price is trading with a $6.06 premium. The risk-free rate is 10%. What is the premium of a put option on the stock with the same strike and expiration? $1.28 $6.06 $7.22 $15.15

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A: Value of call option will be calculated using formula :   C = S × N(d1)  -  N(d2) × PV. (K)where, C…

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A: Excel Spreadsheet: Excel Workings:

Q: I, what is the option's value?

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A: Excel Spreadsheet: Excel Workings:

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A:

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.