A One-Year European Call Option on ABX Corporation with a Strike

question 24

Multiple Choice

A one-year European call option on ABX corporation with a strike price of $50 is currently trading for $1.45,and a one-year European put option on ABX with the same strike price is currently trading for $6.22.If the stock pays a one-time dividend of $1.50 in exactly 6 months,and the risk-free rate is 8% per year,what is the current price of ABX stock?

• A)$42.97
• B)$43.03
• C)$49.63
• D)$52.53
• E)$55.41

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