In September 2020, Facebook's stock price was about $250. A nine-month call on the stock, with an exercise price of $250, sold for $38. The risk-free interest rate was 2% a year. How much would you be willing to pay for a put on Facebook stock with the same maturity and exercise price? Assume that the Facebook options are European options. (Note: Facebook does not pay a dividend.) Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Value of put option

In September 2020, Facebook's stock price was about $250. A nine-month call on the stock, with an exercise price of $250, sold for $38. The risk-free interest rate was 2% a year. How much would you be willing to pay for a put on Facebook stock with the same maturity and exercise price? Assume that the Facebook options are European options. (Note: Facebook does not pay a dividend.) Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Value of put option

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.2IP

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