Unformatted text preview: Assuming a riskfree rate of 4.00 percent, you can calculate that the price of this call options is equal to $3.07. Given this information, calculate the price of an equivalent put option (same parameters). (Take all preliminary numbers out to 9 decimal places.) A. $0.92 B. $1.04 * C. $0.83 D. $0.88 E. $0.97 PV (Exercise) = ($25.00)*e(.04)*(73/365) = $29.76 d 1 = {[ln($32.00/$29.76)] / (.3242)*(73/365) 1/2 } + [(.3242)*(73/365) 1/2 / 2] d 1 = 0.072570693 / 0.144986648 + 0.072493324 = 0.573026952 = 0.57 N(d 1 ) = 0.7157 d 2 = 0.573026952  0.144986648 = 0.428040305 = 0.43 N(d 2 ) = 0.6664 Call Price = ($32.00)*(0.7157)  ($29.76)*(0.6664)...
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This note was uploaded on 07/13/2011 for the course FIN 4414 taught by Professor Staff during the Spring '08 term at University of Florida.
 Spring '08
 Staff
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