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The current price to buy one share of BBB stock is $371. The stock does not pay dividends. The risk-free interest rate is 6% (continuously
- The current price to buy one share of BBB stock is $371. The stock does not pay dividends. The risk-free interest rate is 6% (continuously compounded). A European Call option on one share of BBB stock with a strike price of K that expires on one year cost c = $66.59. A European put option on one share of BBB stock with a strike price of K that expires on one year costs p = $18.64. Given the above market scenario, which is the implied strike price (K)? (Please, justify your answer numerically):
- $359
- $343
- $449
- $582
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Analysis for Financial Management
Authors: Robert C. Higgins
12th edition
1259918963, 9781260140729 , 978-1259918964
