ABC shares are currently trading at $27.00, and they are expected to pay a dividend of $0.50 in 6 month's time. The 6- month put option on ABC shares with an exercise price of $25.00 is currently trading at $1.50. If the risk-free rate is 8%, what should be the value of a 6-month call option on ABC shares with an exercise price of $25.00?
According to Put-Call Parity:
(Stock Price) + (Put) - (Call) = PV(X) + PV(D)
27.00 + 1.50 - c = [(25)/(1.08)0.5] + [(0.50)/(1.08)0.5]
28.50 - c = 24.06 + 0.48
c = $3.96
The correct answer is A) In a Roth IRA, there is no required distribution date as there is in a traditional IRA.
Free info on financial certification exams including study guides, exam questions, and much more!
The correct answer is C). SEC Release IA-1092 considers financial planners, pension consultants and sports and entertainment ...
The correct answer is a): Since Todd owns the stock and expects another stagnant year ahead, he would employ a covered call ...
A examination to ensure a candidate is qualified to become a ...
A person who prepares investigative reports on equity securities. ...
An exam required for individuals seeking to engage in off-exchange ...
One who provides financial advice or guidance to customers for ...
An exam offered by the Financial Industry Regulatory Authority ...
An exam given by the Financial Industry Regulatory Authority ...