17. You are presented with the following information:

A call option with a current value of $7.10. A put option with a current value of $7.00. Both options written on the same stock, with 1 year until expiration, and a strike price of $54.00. The prevailing risk-free rate is 7.00%. What must be the current price of the stock on which these two options are written? *** In your calculations, use simple discounting instead of continuous discounting. Also, do not enter the dollar sign and use two decimals (round off to 2 decimals).

Your Answer:

________

18. Suppose you believe that Du Pont's stock price is going to decline from its current level of $ 84.01 sometime during the next 5 months. For $ 301.79 you could buy a 5-month put option giving you the right to sell 100 shares at a price of $70 per share. If you bought a 100-share contract for $ 301.79 and Du Pont's stock price actually changed to $ 61.95 , your net profit (or loss) after exercising the option would be ______? Show your answer to the nearest .01. Do not use $ or , signs in your answer. Use a - sign if you lose money on the contract.

Your Answer:

_________