Question

GSX stock is selling for $32.40 a share. A 4-month call on GSX stock with a strike price of $35 is priced at $.55. Risk-free assets are currently returning .3 percent per month. What is the price of a 4-month put on GSX stock with a strike price of $35

Answer 1

$3.03

Step-by-step explanation:

Calculation for What is the price of a 4-month put on GSX stock with a strike price of $35

Based on the information given we would be using put-call parity formula

S + P = C + PV(E) P

Let plug in the formula

Price=$0.55 + ($35 / 1.0034) - $32.40

Price=$0.55 + $34.88 - $32.40

Price = $3.03

Therefore the price of a 4-month put on GSX stock with a strike price of $35 will be $3.03