Question
A stock currently sells for $51. A 3-month call option on the stock, with a strike price of $50, has a price of $5. Assuming
A stock currently sells for $51. A 3-month call option on the stock, with a strike price of $50, has a price of $5. Assuming a 10% continuously compounded risk-free rate, determine the price of the associated put option.
Multiple Choice
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$5 because of put-call parity
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$3 so that arbitrage will restore put-call parity
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$2.77
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$1.5
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Public Finance
Authors: Harvey S Rosen, Ted Gayer
9th International Edition
0071267883, 9780071267885
