Question
Grocery Express stock is selling for $66 a share. A three-month, $60 call on this stock is priced at $7.92. Risk-free assets are currently returning
Grocery Express stock is selling for $66 a share. A three-month, $60 call on this stock is priced at $7.92. Risk-free assets are currently returning .2 percent per month. What is the price of a three-month put on Grocery Express stock with a strike price of $60?
| A. | $1.56 | |
| B. | $2.33 | |
| C. | $1.91 | |
| D. | $2.78 |
Della's Pools has 36,000 shares of stock outstanding with a par value of $1 per share and a market price of $26 a share. The firm just announced a 5-for-3 stock split. How many shares of stock will be outstanding after the split?
| A. | 21,600 shares | |
| B. | 36,000 shares | |
| C. | 60,000 shares | |
| D. | 54,000 shares |
According to put-call parity, the present value of the exercise price is equal to the:
| A. | Stock price plus the put premium minus the call premium. | |
| B. | Stock price plus the call premium minus the put premium. | |
| C. | Stock price minus the put premium minus the call premium. | |
| D. | Put premium plus the call premium minus the stock price. |
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