Exhibit 14.4 The current stock price of ABC Corporation is $53.50. ABC Corporation has the following put
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Question:
Exhibit 14.4
The current stock price of ABC Corporation is $53.50. ABC Corporation has the following put and call option prices that expire six months from today. The risk-free rate of return is 5 percent, and the expected return on the market is 11 percent.
Exercise Price | Put Price | Call Price |
50 | $1.50 | $5.75 |
55 | $3.25 | --- |
Refer to Exhibit 14.4. What should the price be of a call option that expires six months from today with an exercise price of $55?
Related Book For
Investment Analysis and Portfolio Management
ISBN: 978-0538482387
10th Edition
Authors: Frank K. Reilly, Keith C. Brown
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