A put option written on the stock of Taylor Enterprises (TE) hasan exercise price of $25 and 6 months remaining until expiration.The risk-free rate is 6%. A call option written on TE has the sameexercise price and expiration date as the put option. TE’s stock priceis $35. If the call option has a price of $12.05, then what is the price(i.e., value) of the put option? ($1.31)
A put option written on the stock of Taylor Enterprises (TE) hasan exercise price of $25 and 6 months remaining until expiration.The risk-free rate is 6%. A call option written on TE has the sameexercise price and expiration date as the put option. TE’s stock priceis $35. If the call option has a price of $12.05, then what is the price(i.e., value) of the put option? ($1.31)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter5: Financial Options
Section: Chapter Questions
Problem 4P: Put–Call Parity
The current price of a stock is $33, and the annual risk-free rate is 6%. A call...
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A put option written on the stock of Taylor Enterprises (TE) has
an exercise price of $25 and 6 months remaining until expiration.
The risk-free rate is 6%. A call option written on TE has the same
exercise price and expiration date as the put option. TE’s stock price
is $35. If the call option has a price of $12.05, then what is the price
(i.e., value) of the put option? ($1.31)
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