Use the table for the question(s)below.
Consider the following information on options from the CBOE for Merck:
-Assume it is now January of 2007 and the current risk-free interest rate is 1%.Using Put-Call Parity and the January 30 option (ask price),estimate the relative contribution of the near-term dividends to the value of Merck's stock.
A)$0.54
B)$2.35
C)$4.30
D)$20.19

Question

Use the table for the question(s)below.
Consider the following information on options from the CBOE for Merck: 
-Assume it is now January of 2007 and the current risk-free interest rate is 1%.Using Put-Call Parity and the January 30 option (ask price),estimate the relative contribution of the near-term dividends to the value of Merck's stock.
A)$0.54 
B)$2.35 
C)$4.30 
D)$20.19

Quizplus · Accepted Answer

The correct answer is A because the near-term dividends contribute $0.54 to the value of Merck's stock.

Use the Table for the Question(s)below