Solved: What is the value of a put option written on the stock, Finance Basics

+44 141 628 6080
[email protected]

What is the value of a put option written on the stock

Current price of a stock is $33, and the annual risk-free rate is 6%. A call option with a strike price of $32 and 1 year until expiration has a current value of $6.56. What is the value of a put option written on the stock with the same exercise price and expiration date as the call option?

Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the value of a put option written on the stock

Reference No:- TGS0559337

Now Priced at $5 (50% Discount)

Recommended (95%)

Rated (4.7/5)

Have a Question? (oR Write a Review)

Write atleast 100 words!!

Recent Questions Asked Finance Basics

Q : Significance for the theory of finance

Discuss the efficient markets hypothesis and its significance for the theory of finance. Explain why market efficiency leads a manager to focus on NPV and free cash flow.

Q : By how much firm-s market and book values per share differ

The company has 530,000 shares of stock outstanding, and they sell at a price of $27.50 per share. By how much do the firm's market and book values per share differ?

Q : Calculate the amount of sales Brookes Bikes

Rigby Company purchased merchandise from a supplier in Hong Kong with an invoice cost of $10,000 and shipping terms of FOB destination. The freight costs amount to $1,000.

Q : What is the default risk premium on the corporate bond

Assume that the liquidity premium on the corporate bond is 0.5%. What is the default risk premium on the corporate bond?

Q : What is the value of a put option written on the stock

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

Q : What is the time for a new employee to do

What is the time for a new employee to do 32 jobs with this learning curve using the cumulative average-time method? You may use an index of -0.1520.

Q : Importance of calculating value of real options

Discuss the importance of calculating the value of real options in finance: namely option to delay, option to expand, and option to abandon.

Q : Emphasis on dividend-discount model

Discuss different methods of valuing stocks with the emphasis on dividend-discount model. Explain how you could incorporate share repurchases into the valuation of a stock.

Q : Calculate the weighted average contribution margin

Prove the breakeven point by preparing a contribution margin income statement Make sure to provide three columns: one for Cat Beds, one for Scratching Posts, and one for Total.

1928889

Questions
Asked

3,689

Active Tutors

1446076

Questions
Answered

Start Excelling in your courses, Ask a tutor for help and get answers for your problems !!

ask Question

Asked Questions

Symbolic interactionism took off as a theoretical approach

Question: Symbolic interactionism took off as a theoretical approach to the study of deviance during the 1960s

How sociological models help understand mental illness

Based on the chapter by Allen Furr on the sociology of mental illness, How do sociological models help you understand mental illness differently

How are schools important in the struggle for power

Question: How are schools important in the struggle for power and status?

How does the pyramid change

Staying with Nigeria, rewind the year to 1950. Using the +5 year control, fast forward in 5 year increments until you reach 2020.

Discuss statements about sociological approaches

Question: Which of the following statements about sociological approaches are true?

Identify problems and concerns that contributed

Identify problems and concerns that contributed to the many race-related protests and unrest during the 2020 year.

Cases of local communities using modern technology

Question: Cases of local communities using modern technology to preserve and revive their traditions: