Improve the firm overall balance of risk-return

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1. A call option is currently selling for $4.60. It has a strike price of $60 and three months to maturity. A put option with the same strike price sells for $7.20. The risk-free rate is 6 percent, and the stock will pay a dividend of $2.10 in three months. What is the current stock price?

2. Management can consider investments on a stand-alone basis, or in the context of a "portfolio", where a particular investment may be risky, but if it's relatively uncorrelated to the firm's other investments, may improve the firm's overall balance of risk/return. (a) true (b) false

Reference no: EM131915436

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