Question
The current price of a stock is $50 and the annual risk-free rate is 10 percent. A call option with an exercise price of $55
The current price of a stock is $50 and the annual risk-free rate is 10 percent. A call option with an exercise price of $55 and one year until expiration has a current value of $7.20. What is the value of a put option (to the nearest dollar) written on the stock with the same exercise price and expiration date as the call option? (Use put-call parity)
| a. | $6.00 | |
| b. | $8.00 | |
| c. | $7.00 | |
| d. | $5.00 | |
| e. | $9.00 |
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Venture capital and the finance of innovation
Authors: Andrew Metrick
2nd Edition
9781118137888, 470454709, 1118137884, 978-0470454701
