Purchase Solution

# Put call parity

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Question 1: A stock is selling for \$26.00. A 2-month put option with a strike price of \$30.00 has an option premium of \$4.15. The risk-free rate is 2.5% and the market rate is 9.75%. What is the option premium on a 2-month call with a \$30.00 strike price? Assume the options are European style.

##### Solution Summary

Uses Put call parity condition to calculate the option premium on a call option.

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Question 1
A stock is selling for \$26.00. A 2-month put option with a strike price of \$30.00 has an option premium of \$4.15. The risk-free rate is 2.5% and the market rate is 9.75%. What is the option premium on a 2-month call with a \$30.00 strike price? Assume the ...

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