A stock is currently selling for $26.50.A 3-month put option with a strike price of $30 has an option premium of $4.05.The risk-free rate is 2.5 percent and the market rate is 9.75 percent.What is the option premium on a 2-month call with a $30 strike price? Assume the options are European style.
A) $0.00
B) $0.33
C) $0.41
D) $0.67
E) $0.73

Question

Quizplus · Accepted Answer

Call option price = $26.50 - $30 / (1 + 0.03)^{3 / 12} + $4.05 = $0.73

A Stock Is Currently Selling for $26