The exercise price of the options is $100 per share, all options are European and the...

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The exercise price of the options is $100 per share, all options are European and the...

The exercise price of the options is $100 per share, all options are European and the stock does not pay any dividend. The call price is $25 per share and the put price is $17 per share. Both options mature in 2 years. Finally, the annual rate of interest is 5% with continuous compounding. What is the stock price today?

Note: Please show all work and formulas, dont just post picture of excel.

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Answer 1

Answer #1

Using Put Call Parity,

25 + 100/(1.05)² = P + 17

P = $98.70

So

Stock Price = $98.70

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Answer 2

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