The 1-year $42 options on Agrium stock are priced at $1.54 for the call and $0.97...

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The 1-year $42 options on Agrium stock are priced at $1.54 for the call and $0.97...

The 1-year $42 options on Agrium stock are priced at $1.54 for the call and $0.97 for the put. The annual risk-free rate is 3 percent. What is the per share price of the underlying stock? (Hint: use the put-call parity to determine the share price)

		$41.35
		$43.19
		$45.27
		$47.64
		$49.13

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Answer 1

Answer #1

Call Price + Strike Price/(1+5%) = Put price + Stock Price
1.54 + 42/1.03 = 0.97 + Share Price
Put Price =1.54+42/1.03-0.97=41.35

Option a is correct option

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Answer 2

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