You are provided with the following option information: Call Premium = R2.96 Put Premium = R4.94 Current

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Question:

You are provided with the following option information:

Call Premium = R2.96

Put Premium = R4.94

Current Share Price = R118.42

Time to Maturity = 6 Months

Risk Free Rate = 4.1%

Assume that everything is correctly priced, the stock does not pay any dividends and both the put and call have the same exercise price.

What is the exercise price of the options?

Related Book For answer-question

Fundamentals of Financial Management

ISBN: 978-0324597707

12th edition

Authors: Eugene F. Brigham, Joel F. Houston

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Posted Date: Jun 13, 2023 12:48 AM

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You are provided with the following option information: Call Premium = R2.96 Put Premium = R4.94 Current

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Expert Answer:

To determine the exercise price of the options we need to apply the putcall parity relatio... View the full answer

Fundamentals of Financial Management

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