Coca-Cola currently has a stock price of $53.75. It also has eight options available with the following Expiration Date, Strike Price (Exercise Price), and Option Price. For Example, you can buy a Feb 55 Call for $3.6 (or you could sell it for $3.6). The risk free rate between now and Feb is 2% while the risk free rate between now and May is 3%.
Expiration Strike Discounted Call Put
Month Price Value Price Price
Feb 50 49.02 4.2
Feb 55 3.30
May 50 .75
May 55 53.40 3.6
3. Using Put-Call Parity, what is the value of the May 55 Put option?
a) $1.15 b) $2.85 c) $3.25 d) $4.85
I do not understand how to get this answer.