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Use the risk-free portfolio approach to price the 1 year

You try to price the options on XYZ Corp.the current stock of XYZ is $100 share.The risk-free rate is 5%.You project the stock price of XYZ will either be $90 or $120 in a year. Assume you can borrow or lend money at the risk -free rate. Use the risk-free portfolio approach to price the 1 year put option on XYZ Corp with the strike price of $105. What is the put -call parity to verify the call and put option prices?

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Finance Basics: Use the risk-free portfolio approach to price the 1 year

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