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Author Question: Rose Industries is currently trading for $47 per share. The stock pays no dividends. A one-year ...  (Read 9 times)

Jramos095

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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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Marked as best answer by Jramos095 on Jul 9, 2019

lkanara2

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C = P + S - PV(K) - PV(Div)
$7.45 = P + $47 - - $0
P = $7.45 - $47 + = $2.90


lkanara2

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