A stock is valued at $25.80 a share.A European 3-month call option has a strike price of $25 and an option premium of $1.40.The market rate is 9.5 percent and the risk-free rate is 3.25 percent.What is the price of a European 3-month put option with a $25 strike price?
A) $0.00
B) $0.09
C) $0.40
D) $1.48
E) $1.61

Question

Quizplus · Accepted Answer

Put option price = $1.40 - $25.80 + $25 / (1 + 0.0325)^{1 / 4} = $0.401

A Stock Is Valued at $25