Value of a put option written on the stock, Accounting Basics

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Value of a put option written on the stock

Problem:

The current price of a stock is $34, and the annual risk-free rate is 3%. A call option with a strike price of $31 and 1 year until expiration has a current value of $4.70.

Required:

Question: What is the value of a put option written on the stock with the same exercise price and expiration date as the call option?

Note: Please provide equation and explain comprehensively and give step by step solution.

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Accounting Basics: Value of a put option written on the stock

Reference No:- TGS0891079

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Accounting Basics: Value of a put option written on the stock

Reference No:- TGS0891079

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

Q : Calculate the average cash flow from the mine

Q : What is the discounted payback period

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Q : Find out the default risk premium on corporate bonds

Q : Value of a put option written on the stock

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Q : What is break-even in units

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Request for Solution File

Ask an Expert for Answer!!

Accounting Basics: Value of a put option written on the stock

Reference No:- TGS0891079

Recent Questions Asked Accounting Basics

Q : Calculate the average cash flow from the mine

Q : What is the discounted payback period

Q : How a disk drive can be formatted

Q : Find out the default risk premium on corporate bonds

Q : Value of a put option written on the stock

Q : Current yield on pk bonds

Q : Describe about power function

Q : Determining the ytm of crossfade

Q : What is break-even in units

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