Homework Clinic
Social Science Clinic => Business => Finance => Topic started by: Jramos095 on Jul 9, 2019
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Rose Industries is currently trading for $47 per share. The stock pays no dividends. A one-year European call option on Luther with a strike price of $45 is currently trading for $7.45. If the risk-free interest rate is 6% per year, then calculate the price of a one-year European put option on Luther with a strike price of $45.
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C = P + S - PV(K) - PV(Div)
$7.45 = P + $47 - - $0
P = $7.45 - $47 + = $2.90
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TY
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