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5. Shares in Rugby plc, a non-dividend-paying company, are trading at 7.50. A one-year European call option on Rugby plc stock with strike price 8.00

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5. Shares in Rugby plc, a non-dividend-paying company, are trading at 7.50. A one-year European call option on Rugby plc stock with strike price 8.00 has a risk-neutral probability of exercise equal to 40%. Explain what this implies about the risk-neutral probability of exercise for a one-year European put option on Rugby plc with strike price 8.00. *

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