The price of a European call and put on a stock are $ 2 and $ 5

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Question:

The price of a European call and put on a stock are $

2

and $

5,

respectively. Both have a strike price of $

45

and an expiration date of

6

months. The current stock price is $

40

and the continuously compounded dividend yield is

3 % .

Markets are assumed to be free of arbitrage.

)

What is the market implied

6 -

month risk

-

free interest rate?

)

What is the market implied

6 -

month forward price on a forward contract on the stock?

)

What is the market implied

6 -

month cost of carry?

Posted Date: May 18, 2024 11:16 PM

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The price of a European call and put on a stock are $ 2 and $ 5

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