IOU stock is selling for $39.40 a share.The 6-month $40 call costs $1.20.Risk-free assets are currently returning 0.15 percent per month.What is the price of the 6-month $40 put?

Name: IOU stock is selling for $39.40 a share.The 6-month $40 call costs $1.20.Risk-free assets are currently returning 0.15 percent per month.What is the price of the 6-month $40 put?
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Question

Quizplus · Accepted Answer

Put price = $40 / 1.0015⁶ + $1.20 - 39.40 = $1.44

IOU Stock Is Selling for $39