The common stock of triangular file company is selling at, Ask an Expert

Finance

The common stock of Triangular File Company is selling at $102. A 26-week call option written on Triangular File’s stock is selling for $20. The call’s exercise price is $112. The risk-free interest rate is 8% per year.

a. Suppose that puts on Triangular stock are not traded, but you want to buy one. Which combination will produce the same results?

Answer: Buy call, invest PV(EX), sell stock short

b. Suppose that puts are traded. What should a 26-week put with an exercise price of $112 sell for? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Put option price $

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92371211

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