Repeat the analysis of problem 14.7, but this time focus on the Facebook call and put options
Question:
Repeat the analysis of problem 14.7, but this time focus on the Facebook call and put options in Figure 14.1 that have a strike price of $87.50. If you use put-call parity to find the price of Facebook stock at the time those call prices were quoted, would you expect to get the same answer that you found in problem 14.6? Do you in fact get the same answer?
Data from problem 14.7
Look at the Facebook option quotes in Figure 14.1, and focus on the call and put options with a strike price of $80. Can you use put-call parity to infer what the market price of Facebook stock must have been when these option prices were quoted? To keep things simple, assume the options expire in one month, and that the risk-free rate at the time was 0%.
Figure 14.1
Strike PriceIn finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity.
Step by Step Answer:
Fundamentals Of Investing
ISBN: 9780134083308
13th Edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk