Answer:
The answer is 5.559539 or 5.56.
Explanation:
From the given question let us recall the following statements
The current price of A put option on a stock = $47
With an exercise price of $49
Annual risk-free rate of annual interest is = 5%
The corresponding price call option is = $4.3
The next step is to find the put value
Now,
The Call price + Strike/(1+risk free interest) The Time to maturity =
Spot + Put price
Thus
The,Put price = Call price - Spot + Strike/(1+risk free interest)Time to maturity
When we Substitute the values, we get,
Put price = (4.35 - 47) + 49/1.05 4/12
Therefore, The Put Price = 5.559539 or 5.56
