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Andrei [34K]
3 years ago
14

Top Flight Stock currently sells for $53. A one-year call option with strike price of $58 sells for $10, and the risk-free inter

est rate is 5.5%. What is the price of a one-year put with strike price of $58
Business
1 answer:
musickatia [10]3 years ago
7 0

Answer:

$11.97

Explanation:

Calculation for the price of a one-year put

Using this formula

Price=Call option-Stock+Strike price(1+Risk-free interest rate)

Let plug in the formula

Price = $10 - $53 + $58/(1+.055)

Price = $10 - $53 + $58/(1.055)

Price= $11.97

Therefore the price of a one-year put with strike price of $58 will be $11.97

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Vaughn Company has the following securities in its investment portfolio on December 31, 2020 (all securities were purchased in 2
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Answer:

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Munter Ltd. 10,200 shares at $57 per share

King Co. 5,600 preferred stock at $42 per stock

a. Prepare the entry for the security sale on January 15, 2021.

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