Given the Following Data: Expiration = 6 Months; Stock Price

question 56

Multiple Choice

Given the following data: Expiration = 6 months; Stock price = $80; exercise price = $75; call option price = $12; risk-free rate = 5% per year. Calculate the price of an equivalent put option using put-call parity:

• A) $3.07
• B) $5.19
• C) $11.43
• D) none of the above

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Definitions:

Nervous Tissue

A type of tissue in the body made up of neurons and glial cells that forms the brain, spinal cord, and nerves, responsible for sensing stimuli and transmitting signals.

Dense Regular Collagenous

A type of connective tissue that has closely packed collagen fibers aligned in a parallel manner, providing high tensile strength in one direction, commonly found in tendons and ligaments.

Tendons

Fibrous connective tissues that attach muscle to bone, allowing for the transmission of forces to facilitate movement.

Ligaments

Tough, fibrous connective tissues that connect bones to other bones, providing joint stability.