Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the current price of a stock is $50 and the annual

The current price of a stock is $50 and the annual risk-free rate is 8...

90.2K

Verified Solution

Question

Accounting

The current price of a stock is $50 and the annual risk-free rate is 8 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. $9.00 b. $7.00 c. $5.00 d. $6.00 e. $8.00

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

You are evaluating two different silicon wafer milling machines. The Techron I costs $261,000, has a...

Finance
Q

A circus clown is to be fired from a cannon at an angle of 60 degress...

Advance Math
Q

Analyzing Foreign Currency Hedges The Arizona Company, a U.S.-based manufacturer, ordered a piece of equipment from Sonora Inc., a...

Finance
Q

Question 64 Choose the correct answer to complete the statement A simile is Points 1...

Biology
Q

1 i ii iv stration 6 32 Two blocks A and B of mass M...

Physics
Q

Jose is a human resources executive for a technology company He is deciding between two...

Statistics
Q

a The mean is closest to b The median is closest to A B C...

Statistics
Q

5 3x 2x4 8x 10x 9

Algebra
Q

A partial trial balance of the Brown Manufacturing Corporation as of December 31. 2000 follows:...

Accounting
Q

pg 7 Croy Incorporated has the following projected sales...

Accounting
Q

After discontinuing the ordinary business operations and closing the accounts on May 7, the ledger...

Accounting
Q

d) None of the above 8. In case of a breach of contract a person...

Accounting