Question
Coca-Cola currently has a stock price of $53.75. It also has eight options available with the following Expiration Date, Strike Price (Exercise Price), and Option
Coca-Cola currently has a stock price of $53.75. It also has eight options available with the following Expiration Date, Strike Price (Exercise Price), and Option Price. For Example, you can buy a Feb 55 Call for $3.6 (or you could sell it for $3.6). The risk free rate between now and Feb is 2% while the risk free rate between now and May is 3%.
Expiration Month | Strike Price | Discounted Value | Call Price | Put Price |
Feb | 50 | 49.02 | 4.2 | |
Feb | 55 | 3.3 | ||
May | 50 | 0.75 | ||
May | 55 | 53.40 | 3.6 |
Using Put-Call Parity, What is the value of the May 55 Put option?
A) $1.15
B) $2.85
C) $3.25
D) $4.85
Please show work......Does the Risk free rate have anything to do with this question???
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