Question

Exercise price $150 Spot Price $110 Risk rate is 5% Using Put-Call Parity & continuous compounding...

Exercise price $150

Spot Price $110

Risk rate is 5%

Using Put-Call Parity & continuous compounding

A. If the premium for the Call is $12.00,what is the Premium for the Put, given both options expire in 1.5 years?

B If the Premium for the Put is $3.00 and both options expire in 3.5 years, then how much is the Premium for the Call option?

Using excel!

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A call and a put are held in a diversed portfolio & they both have an...
A call and a put are held in a diversed portfolio & they both have an exercise price of $140 The Spot price of the stock is $100 Risk free rate is 6%. Use Put-Call Parity for A& B A. The premium for the Call is $15.00, what is the Premium for the Put, given both options expire in 1.5 years? B. The Premium for the Put is $3.00 and both options expire in 3.5 years, then how much is...
A call and a put are held in a portfolio, having an exercise price of $150,...
A call and a put are held in a portfolio, having an exercise price of $150, the premium for the call is $5.00, the premium for the put is $2.00, and the risk free rate is 6%. A. Using continuous compounding what is the Spot price of the stock if both options expire in 3 years B. Using monthly compounding, what is the Spot price of the stock if both options expire in 3 years? Show formula
A call and a put are held in a portfolio, both have an exercise price of...
A call and a put are held in a portfolio, both have an exercise price of $140 Premium for the call is $5.00 Spot price of the stock is $145, and the risk free rate is 4%. A. Using continuous compounding, what is the Premium of the Put if both options expire in 2.5 years? B. Using monthly compounding, what is the Premium of the Put if both options expire in 2.5years? C. Does the Put-Call Parity equation work when...
A stock sells for $60 and the risk free rate of interest is 5 percent. A...
A stock sells for $60 and the risk free rate of interest is 5 percent. A call and a put on this stock expire in one year and both options have an exercise price of $55. How would you trade to create a synthetic call option? If the put sells for $3, how much is the call option worth ? Assume continuous compounding?
Price a 1 year forward, with continuous compounding risk free rate of 5%, spot price of...
Price a 1 year forward, with continuous compounding risk free rate of 5%, spot price of $1 and a dividend of $0.10 after 6 months. The price is _______. 0.93 1.75 0.95 1.05
Put Call Parity Using the Apple (AAPL) option chain, the stock price is $226.82, the term...
Put Call Parity Using the Apple (AAPL) option chain, the stock price is $226.82, the term is 45 days, estimate a risk-free rate (T-bill), use the 225 strike, use the bid/ ask mean quote call = $10.175. Using Put Call Parity solve for the put and please show all you work.
You purchase 100 put options on a stock with exercise price of $52 at a premium...
You purchase 100 put options on a stock with exercise price of $52 at a premium of $4.30 per put. You also purchase 100 call options on the same stock with exercise price of $54 and call premium of $5.10 per call. If at expiration of the options (the options expire on the same date), the stock's price is $52.79, calculate your profit. According to put-call parity, the present value of the exercise price is equal to the: A. Stock...
Consider a European call option and a European put option on a non dividend-paying stock. The...
Consider a European call option and a European put option on a non dividend-paying stock. The price of the stock is $100 and the strike price of both the call and the put is $104, set to expire in 1 year. Given that the price of the European call option is $9.47 and the risk-free rate is 5%, what is the price of the European put option via put-call parity?  
Imagine that you are unable to short-sell a particular stock. Using put-call parity, replicate a short...
Imagine that you are unable to short-sell a particular stock. Using put-call parity, replicate a short position in the stock, assuming that the stock pays no dividends, there is a put and a call option, both of which have the same exercise price, K, and the same time to expiration, T. You are able to borrow and lend the continuously compounded risk free rate, r.
A call option with an exercise price of $110 has six months to the expiration date....
A call option with an exercise price of $110 has six months to the expiration date. Currently, the stock is sold at a price of $120. At the expiration date, the underlying stock has two possible ending prices: $150 or $105. The risk-free rate of return is 8 percent per annum. Calculate the price of this call option using binomial option pricing model.