Purchase Solution

Put- Call Parity

Not what you're looking for?

Ask Custom Question

Dynamic Energy Systems stock is currently trading for $33 per share. The stock pays no dividends. A one-year European put option on Dynamic with a strike price of $35 is currently trading for $2.10. If the risk-free interest rate is 10% per year, what is the price of a one-year European call option on Dynamic with a strike price of $35.

Purchase this Solution
Solution Summary

Uses Put- Call Parity condition to find the value of call option

Solution Preview

Please see the attached file:
Dynamic Energy Systems stock is currently trading for $33 per share. The stock pays no dividends. A one-year European put option on Dynamic with a strike price of $35 is currently trading for $2.10. If the risk-free interest rate is 10% per year, what is ...

Purchase this Solution
Free BrainMass Quizzes
SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

View More Free Quizzes
Related BrainMass Solutions

  • Put-Call Parity: What is the value of a put option written on the stock with the same exercise price and expiration date as the call option?

    using put-call parity.

  • Put call parity, implied volatility

    Calculates the implied volatility of the call option, uses put call parity to calculate the value of put option.

  • Put-call Parity

    b) Use the put-call parity to show VC(S, t) ≥ S - Ke-r(T-t) VP(S, t) ≥ Ke-r(T-t) - S Please see the attached file for the complete solution. Thanks for using BrainMass. Put-call parity is investigated.

  • Put-call parity

    call parity: p=c + X * e -r(T-t) -S e -q(T-t)= $0.0550 =0.0665+1.767519-1.77902 Answer: Value of put= $0.0550 or 5.50 cents The solution calculates the put premium using Put-call parity.

  • Call and Put Prices

    300634 Q1: Use Derivagem to calculate the implied volatility of the call option. Q2: Use put-call parity to estimate the no arbitrage price of a March 100 put.

  • Put- Call Parity

    Uses Put-Call Parity condition to find the value of call option.

  • Put call parity

    We will use put call parity condition to get the premium on call option, given the put premium (with the same strike price and expiration date) and the risk free rate Put- Call Parity c+ Xe^-(r(T-t

  • Option Puts for File Co: put-call parity

    What should a 26-week put with an exercise price of $100 sell for? Please find my response below. 1). We will use the Put-Call Parity to determine the price of the put.

  • European-style contracts

    447836 European-style contracts Determine whether the $2.45 difference in the market prices between the call and put options is consistent with the put-call parity relationship for European-style contracts.

  • put-call parity theorem

    130934 put-call parity theorem 2. Using the put-call parity theorem, determine the value of a T period put of the stock described in problem 1 with an exercise price of $110. I ONLY NEED PROBLEM 2 TO BE SOLVED.

View More Related Solutions