When Stock Z was trading at 60, Dee purchased a 1-year put option with a strike price of 58, for a premium of 5, and Spencer entered into a 1-year short forward contract on Z.

You are also given:

• The continuously compounded risk-free interest rate is 0.05
• Z pays no dividends.
• Dee has a positive profit at expiration.

At the end of one year, the profit on Spencers transaction is three times as large as the profit on Dees transaction.

Calculate the price of Stock Z at the expiration of these contracts.

When Stock Z was trading at 60, Dee purchased a 1-year put option with a strike price of 58, for a premium of 5, and Spencer entered into a 1-year short forward contract on Z. You are also given: The continuously compounded risk-free interest rate is 0.05 Z pays no dividends. Dee has a positive profit at expiration. At the end of one year, the profit on Spencer's transaction is three times as large as the profit on Dee's transaction. Calculate the price of Stock Z at the expiration of these contracts. A 47-58 B 52.83 55-33 D 51.26 E 48.67