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Math Help - Finance/Put-Call Parity/What is the value of May put option?

  1. #1
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    Finance/Put-Call Parity/What is the value of May put option?

    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.
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  2. #2
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    Re: Finance/Put-Call Parity/What is the value of May put option?

    Expiration Month Feb Strike Price 50 Discounted Value 49.02 Call Price 4.2
    Exp Month Feb Strike Price 55 Put Price 3.30
    Exp Month May Strike Price 50 Put Price 0.75
    Exp Month May Strike Price 55 Discounted Value 53.40 Call Price 3.6
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  3. #3
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    Re: Finance/Put-Call Parity/What is the value of May put option?

    post business math questions in the business mass forum
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    Re: Finance/Put-Call Parity/What is the value of May put option?

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