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A put option with a strike price of $90 sells for $6.3. The option expires in...

A put option with a strike price of $90 sells for $6.3. The option expires in four months, and the current stock price is $92.3. If the risk-free interest rate is 4.3 percent, what is the price of a call option with the same strike price? (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Price of a call option $

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Answer #1

  

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As per Call Put Partiy

Strike Price * e^(-r*t) + Premium on Call Option = Current Value of Stock + Premium on Put Option

where r is the risk free rate of return i.e. 0.043

t is the time period 4 / 12 = 0.33333333333

90 * e^(-0.043*0.333333333333) + P = 92.3 + 6.3

90 * e^(-0.01433333333) + P = 92.3 + 6.30

90 * 0.98576889986 + P = 92.3+ 6.30

88.7192009874 + P = 92.3 + 3.35

P = 6.93

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