The stock price of Atlantis Corp. is $43 today. The risk-free rate of return is 10%, and Atlantis Corp. pays no dividends. A call option on Atlantis Corp. stock with an exercise price of $40 and an expiration date 6 months from now is worth $5 today. A put option on Atlantis Corp. stock with an exercise price of $40 and an expiration date 6 months from now should be worth ________ today.
A) $0.05
B) $0.14
C) $2
D) $3.95

Question

Quizplus · Accepted Answer

P = C + Xe−rRT − S0 = 5 + 40e−(0.1)(0.5) − 43 = $0.049

The Stock Price of Atlantis Corp