Question: A call and a put are held in a diversed portfolio & they both have an exercise price of $140 The Spot price of the

A call and a put are held in a diversed portfolio & they both have an exercise price of $140

The Spot price of the stock is $100

Risk free rate is 6%.

Use Put-Call Parity for A& B

A. The premium for the Call is $15.00, what is the Premium for the Put, given both options expire in 1.5 years?

B. The Premium for the Put is $3.00 and both options expire in 3.5 years, then how much is the Premium for the Call option?

(Solve using continuous compounding for A & B and show formula/steps)

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