A call option with 6 months to expiration currently sells for $2.05.A put option with the same expiration sells for $0.60.The options are European style.The risk-free rate is 3.0 percent and the strike price of both options is $50.What is the current stock price?
A) $47.89
B) $49.19
C) $50.72
D) $51.29
E) $52.08

Question

Quizplus · Accepted Answer

Stock price = $2.05 - $0.60 + $50 / (1 + 0.03)^{6 / 12} = $50.72

A Call Option with 6 Months to Expiration Currently Sells