A European put option has 12 months to expiry and a strike price of $22. The underlying

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A European put option has 12 months to expiry and a strike price of $22. The underlying stock has a current price of $20. The riskfree rate of interest is 4% per annum.

A European call option is written on the same stock. It also has a $22 strike price and 12 months to expiry. The call is priced at $1.93.

What is the price of the put option?

What is the intrinsic value of the put option?

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Essentials of Business Analytics

ISBN: 978-1285187273

1st edition

Authors: Jeffrey Camm, James Cochran, Michael Fry, Jeffrey Ohlmann, David Anderson, Dennis Sweeney, Thomas Williams

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Posted Date: Apr 25, 2024 06:53 AM

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A European put option has 12 months to expiry and a strike price of $22. The underlying

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Expert Answer:

To calculate the price of the put option we can use the BlackScholes formula The formul... View the full answer

Essentials of Business Analytics

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