Calculate the Price of a European Put Option If the Price

question 12

Multiple Choice

Calculate the price of a European put option if the price of the equivalent European call option is $6 and the share price,exercise price and risk-free rate (continuously compounded) are $30,$28 and 15% p.a. ,respectively.The options have six months to expiry.Assume that put-call parity holds.

• A)$10.02
• B)$2.05
• C)$1.98
• D)$9.95
• E)$2.97