Refer to exhibit 14.4. What is the value of a synthetic stock created with put and call options that expire in six months with an expiration price of $50?

 

Exhibit 14.4 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) The current stock price of ABC Corporation is $53.50. ABC Corporation has the following put and call option prices that expire six months from today. The risk-free rate of return is 5 percent, and the expected return on the market is 11 percent. Exercise Price 50 8 55 Put Price $1.50 $3.25 Call Price $5.75