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A call option on Jupiter Motors stock with an exercise price of $80 and one-year expiration is selling at $2. A put option on Jupiter stock with an exercise price of $80 and one-year expiration is selling at $.5. If the risk-free rate is 8% and Jupiter pays no dividends, what should the stock price be?

User Tim Hope
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1 Answer

7 votes

Answer:

$70.85

Step-by-step explanation:

Please see attachment.

A call option on Jupiter Motors stock with an exercise price of $80 and one-year expiration-example-1
User Pfitzseb
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8.4k points
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