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  3. part a a put option and a call option with an.

Part A A put option and a call option with an...

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Accounting

Part A

A put option and a call option with an exercise price of $80 and three months to expiration sell for $1.45 and $4.40, respectively.

If the risk-free rate is 4.6 percent per year, compounded continuously, what is the current stock price?

Part B

A call option has an exercise price of $60 and matures in three months. The current stock price is $64, and the risk-free rate is 5 percent per year, compounded continuously. What is the price of the call if the standard deviation of the stock is 0 percent per year?

Part C

A put option and call option with an exercise price of $50 expire in four months and sell for $1.02 and $5.00, respectively.

If the stock is currently priced at $53.30, what is the annual continuously compounded rate of interest?

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