Compute the current stock price if the risk-free interest

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1. A call option sells for $4. It has a strike price of $40 and six months to maturity. If the underlying stock presently sells for $30 per share, compute the the price of a put option with a $40 strike and six months to maturity. The risk-free interest rate is 5 percent. Use this formula: P = C - S + Ke-rT

2. A call option is at present selling for $10. It has a strike price of $80 and three monthsto maturity.Compute the price of a put option with a $80 strike and three months to maturity. The current stock price is $85, and the risk-free interest rate is 6 percent. Use this formula: P = C - S + Ke- rT

3. A call option presently sells for $10. It has a strike price of $80 and three months to maturity. A put with the same strike and expiration date sellsfor $8. Compute the current stock price if the risk-free interest rate is 4 percent. Use this formula: S = C - P + Ke-rT

Reference no: EM132523316

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