Answered step by step
Verified Expert Solution
Question
1 Approved Answer
If the common stock of Company X is $100 per share, and the price of 3-month call option at an exercise price of $100 is
If the common stock of Company X is $100 per share, and the price of 3-month call option at an exercise price of $100 is $10. If the risk-free interest rate is 8% per year and no arbitrage opportunity exists, what would be the price of 3-month put option on this stock at an exercise price of $100? (Hint: use put-call parity)
a. $7.65
b. $8.56
c. $10.00
d. $8.09
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started