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What is the price of a? one-year american put option

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Reference no: EM132000575

Consider an American put option on XAL stock with a strike price of ?$69 and one year to expiration. Assume XAL pays no? dividends, XAL is currently trading for ?$13 per? share, and the? one-year interest rate is 9 %. If it is optimal to exercise this option? early:

a. What is the price of a? one-year American put option on XAL stock with a strike price of ?$77 per? share?

b. What is the maximum price of a? one-year American call option on XAL stock with a strike price of ?$69 per? share?

Reference no: EM132000575

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