A call option with an exercise price of $40 and four months to expiration sells for $6.78. If the risk-free rate is 1.80% per year (compounded continuously) and the market price of a stock is $45, calculate the price of a put option on this stock $5.24 $5.00 $1.54 $2.50

A call option with an exercise price of $40 and four months to expiration sells for $6.78. If the risk-free rate is 1.80% per year (compounded continuously) and the market price of a stock is $45, calculate the price of a put option on this stock $5.24 $5.00 $1.54 $2.50

Fundamentals of Financial Management (MindTap Course List)

14th Edition

ISBN:9781285867977

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter18: Derivatives And Risk Management

Section18.A: Valuation Of Put Options

Problem 1P

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Question 16

		$5.24
		$5.00
		$1.54
		$2.50

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