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A Call Option with 1 Month to Expiration Currently Sells

question 87

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A call option with 1 month to expiration currently sells for $0.70.A put option with the same expiration sells for $1.10.The options are European style.The risk-free rate is 3 percent and the strike price of both options is $18.00.What is the current stock price?


Definitions:

Trustee

A person licensed to receive and dispose of the assets of a bankrupt, then distribute the proceeds to the creditors.

Beneficiary

An individual or entity entitled to receive benefits or assets from a trust, will, or life insurance policy.

Statutory Assignment

The transfer of rights or interests in a particular matter as authorized and regulated by statute.

Equitable Assignment

A transfer of rights or benefits from one party to another, recognized by equity courts even if not formally executed.

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