Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In October 2011, a 15-month call on the stock of Amazon.com , with an exercise price of $240, sold for $45.20. The stock price was

In October 2011, a 15-month call on the stock of Amazon.com , with an exercise price of $240, sold for $45.20. The stock price was $240. The risk-free interest rate was 4%. How much would you be willing to pay for a put on Amazon stock with the same maturity and exercise price? Assume that the Amazon options are European options. (Note: Amazon does not pay a dividend.) (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Quantitative Analysis For Management

Authors: Barry Render, Ralph M. Stair, Michael E. Hanna, Trevor S. Hale

14th Edition

0137943601, 9780137943609

More Books

Students also viewed these Finance questions

Question

Is the message suitable for a global audience? (625)

Answered: 1 week ago