Intel Corp has a share price of $31.63 and a yearly dividend of $1.50 per year. An option with a strike price of $27 has a call price of $6.10, and a put price of $2.65. It has a 1 yr expiry period. Assuming no interest, what is the predicted share price according to the put-call parity relationship?
Answers
Given:
share price = $31.63
yearly dividend = $1.50 per year
strike price = $27
call price = $6.10
put price = $2.65
expiry period = 1 year
To find:
Predicted share price
Solution:
As we know that put-call party is a relationship of price between the call option, put option, and the underlying stock
Now we use the formula which is shown below:
where,
= put option
= call option
X = strike price
t = time
r = risk free rate of return
D = dividend
Now Stock price is
So, the strike price is $31.95
Learn more
Going short on a currency and long on a call option results in the pay off profile of a
Put option writer
Call option buyer
Put option buyer
Call option writer
https://brainly.in/question/9907467
Intel Corp has a share price of $31.63 and a yearly dividend of $1.50 per year. An option with a strike price of $27 has a call price of $6.10, and a put price of $2.65. It has a 1 yr expiry period. Assuming no interest, what is the predicted share price according to the put-call parity relationship?
https://brainly.in/question/17383550
Given:
share price = $31.63
yearly dividend = $1.50 per year
strike price = $27
call price = $6.10
put price = $2.65
expiry period = 1 year
To find:
Predicted share price
Solution:
As we know that put-call party is a relationship of price between the call option, put option, and the underlying stock
Now we use the formula which is shown below:
P_o + S_o = C_o +( D + X \times e^{rt} ...................1P
o
+S
o
=C
o
+(D+X×e
rt
...................1
where,
P_oP
o
= put option
C_oC
o
= call option
X = strike price
t = time
r = risk free rate of return
D = dividend
Now Stock price is
S_o + P_o = Co + D + XS
o
+P
o
=Co+D+X
S_o + $2.65 = $6.10 + $1.5 + $27
So, the strike price is $31.95
Learn more
Going short on a currency and long on a call option results in the pay off profile of a
Put option writer
Call option buyer
Put option buyer
Call option writer
https://brainly.in/question/9907467
Intel Corp has a share price of 31.63 and a yearly dividend of31.63andayearlydividendof1.50 per year. An option with a strike price of 27 has a call price of27hasacallpriceof6.10, and a put price of $2.65. It has a 1 yr expiry period. Assuming no interest, what is the predicted share price according to the put-call parity relationship?
https://brainly.in/question/17383550
Thanks!!!!