Question
1.Consider call and put options on a non-dividend paying stock. The price of a call option with a strike price of $30 and 6 months
1.Consider call and put options on a non-dividend paying stock. The price of a call option with a strike price of $30 and 6 months to maturity is $1.75. If the current stock price is $29.8 and the interest rate is 10% per annum continuously compounded, what is the price of the put option with the same strike price and maturity?
A.$1.32
B.$1.18
C.$0.96
D.$0.72
E.$0.48
2.Consider the above but with the only change that the stock would pay a dividend of $1 after 3 months. If the price of the call option is $1.75, what is the price of the put option?
A.$2.27
B.$2.13
C.$1.98
D.$1.72
E.$1.46
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