The 3-month $40 options on Leeway Motors stock are priced at $.22 for the call and $1.54 for the put.The risk-free rate is 0.3 percent per month.What is the per share price of the underlying stock?

Name: The 3-month $40 options on Leeway Motors stock are priced at $.22 for the call and $1.54 for the put.The risk-free rate is 0.3 percent per month.What is the per share price of the underlying stock?
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Quizplus · Accepted Answer

Stock price = $.22 + $40 / 1.003³ − $1.54 = $38.32

The 3-Month $40 Options on Leeway Motors Stock Are Priced