Unformatted text preview: return if you bought the stock initially rather than purchasing a put option. 4. A 30strike 2 year call option costs $2 . 98 and a 30strike 2 year put option costs 5 . 51. If the current stock price is 35 and the continuous interest rate is 3%, ﬁnd the dividend rate. 5. A 55strike 3 year call option costs $6 . 39 and a 75strike 3 year put option costs 4 . 68. You purchase both a call and a put option by borrowing money. Find your proﬁt in 3 years if the stock price is 40, 65, and 80....
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 Fall '10
 TimKnapik
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