Question: Please explain the answer or steps. Thank you. 25. A put option on a stock with a current price of $33 has an exercise price

Please explain the answer or steps. Thank you. 25. A put

Please explain the answer or steps. Thank you.

25. A put option on a stock with a current price of $33 has an exercise price of S35. The price of the corresponding call option is $2.25. If the effective annual risk-free rate of interest is 4% and there are three months until expiration, what should be the value of the put? A) $2.5 B) S3.91 C) S4.8 D6.12 (Ans: Using put-call parity: Put-C-So + PV(X) = $2.25-$33 + $35/(1 + .04)3/12-$3.91 )

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