What is the price of put option derived from put-call parity

Assignment Help Financial Management
Reference no: EM131611226

A share of stock has both put and call options outstanding based on it. The current stock price is $70. The call and put options both have 70 days to expiration and exercise prices of $65. The risk free rate is 4%. The call option is currently priced at $7.20. The stock does not pay dividends. What is the price of the put option derived from put-call parity?

Reference no: EM131611226

Questions Cloud

Calculate the cash flows for project : Assume that machine will be fully depreciated and cannot be resold. Calculate the cash flows for this project.
Pros-cons of centralized trading system with clearing house : What are the pros and cons of a centralized trading system with a clearinghouse?
What is the investor total net gain or loss on the trade : What is the investor’s total net gain or loss on the trade?
What is sears before-tax component cost of debt : What is Sears’s before-tax component cost of debt?
What is the price of put option derived from put-call parity : A share of stock has both put and call options outstanding based on it. What is the price of the put option derived from put-call parity?
Analysts forecast target growth rate : Analysts forecast Target’s growth rate to be 8.00 percent in the future.
Current account surplus or capital account surplus : What are the three methods of financing small business operations. What in your opinion is better for country-current account surplus or capital account surplus
Determine the effect of its inventory turnover ratio : Winston Inc. is trying to determine the effect of its inventory turnover ratio and days sales outstanding on its cash conversion cycle.
What is the mirr of investment : The company has a weighted average cost of capital of 16 percent (use this as the reinvestment rate). What is the MIRR of the investment?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd