Question: Exercise 4 (1 mark for each part). (a) Suppose that a stock paying no income is trading at price 15.60 per share. European calls on

Exercise 4 (1 mark for each part). (a) Suppose that a

Exercise 4 (1 mark for each part). (a) Suppose that a stock paying no income is trading at price 15.60 per share. European calls on the stock with strike 15 and exercise date in three months are trading at price 2.83 The three-month continuous interest rate is r = 6.72%. What is the price of a European put with the same strike and exercise date? (b) Repeat part (a) for a stock paying dividends at continuous rate q - 3 %

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