Final answer:
The current stock price can be inferred by using the put-call parity formula and adjusting for the present value of the exercise price using the given interest rate of 5% per annum.
Step-by-step explanation:
The student is asking about the pricing of options in the context of financial markets, a subject that falls under Business and, specifically, financial economics. The question involves calculating the current stock price based on the price of call and put options with the same exercise price and maturity. Given that the value of both the three-month call and put options is $10 each and that the exercise price of the options is $60, we can infer that the stock price is at a level where the cost of buying a call and a put equals the exercise price adjusted for the present value of the exercise price using the given interest rate (5% per annum).
To find the current stock price (S), we can use the put-call parity formula:
Call price + PV(Exercise price) = Put price + Stock price
$10 + $60/(1 + 0.05/4)^1 = $10 + S
After rearranging the equation and solving for S, we find that:
S = ($10 + $60/(1 + 0.05/4)^1) - $10
S = Stock price
Therefore, by using the formula and plugging in the values, we can calculate the current stock price.