Question: You are considering purchasing a put option on a share with a current price of $45. The exercise price is $47 and the price of

You are considering purchasing a put option on a share with a current price of $45. The exercise price is $47 and the price of the corresponding put option is $6.91. According to the put-call parity theorem, if the risk-free rate of interest is 4.30% and there are 102 days until expiration, the value of the call should be ________

Input your answer to two decimal point of accuracy, DO NOT include the dollar sign.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

You purchase one put contract with exercise rice of $140 for a put premium of $9. If the contract is for 100 shares of stock, the maximum profit that you could gain from this strategy is $14,000 $140...

D. decrease; decrease 31. You find the option prices for three June call options on the same stock. The 95 call has an implied volatility of 25%, the 100 call has an implied volatility of 25%, and...

1. You purchase one IBM July 120 put contract for a premium of $5 (per share). You hold the option until the expiration date when IBM stock sells for $123 per share. You will realize a ______ on the...

You are considering purchasing a put option on a stock with a current price of $ 2 2 . The exercise price is $ 2 4 , and the price of the corresponding call option is $ 2 . 4 5 . According to the put...

14. A hedge ratio of 0.70 implies that a hedged portfolio should consist of A. long -70 calls for each short stock B. long -70 shares for each long call C. long -70 shares for each short call D....

You are considering purchasing a put option on a stock with a current price of $44. The exercise price is $47, and the price of the corresponding call option is $3.55. According to the put- call...

QUESTION 3 Assume that a stock price is currently at S - $60. It is known that in one year stock price will be either $75 or $45. The annual interest rate is rp=5%. Using a one-period binomial tree...

You are considering purchasing a put option on a stock with a current price of $44. The exercise price is $47, and the price of the corresponding call option is $3.55. According to the put-call...

You are considering purchasing a put option on a stock with a current price of R73 that will pay a dividend of R3.2 per share in 3 months. The exercise price of a put option is R75, and the price of...

Today you are buying a call option on ABC stock. The call option has a strike price of $33, 1 months to expiration, and currently trades at a premium of $6 per share, what is the break-even stock...

The text below describes a scenario in which your company is building an automotive electronics component for a vehicle manufactured in the United States. Your customer is a major automotive OEM....

In order to determine the mass moment of inertia of a flywheel of radius 1.5 ft, a 20-lb block is attached to a wire that is wrapped around the flywheel. The block is released and is observed to fall...

3. In what way is a whole life policy superior to either a variable life or term life policy? In what way is a variable life policy superior? How about term life insurance?

last two options for the multiple choice are : performance management development A construction equipment manufacturer, Roswell Corporation, is focusing on becoming a leader in sustainability in...

8. Explain the contact hypothesis.

2. Define the grand narrative.

9. Identify eight contact conditions that influence positive attitude change.