4) You have found the following information on a stock option: Stock price = $60; strike...
4) You have found the following information on a stock option: Stock price = $60; strike price = $65, Call price = $3. The option expires in 6 months, and the current risk-free rate is 3.1%. Calculate the option put price?
Homework Answers
Using Put Call Parity Equation,
C + X/(1 + r)n = Stock Price + P
C = Price of Call Option
X = Exercise Price
P = Price of Put Option
3 + 65/(1.031)6/12 = 60 + P
P = $7.02
So,
Price of Put Option = $7.02
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