Solved

The Price of a European Call Option on RBC Stock

Question 66

Multiple Choice

The price of a European call option on RBC stock with an exercise price of $85 and one year to expiry is trading at $3.15.The current price of the stock is $81.25,and the risk-free rate is 2.5%.With no arbitrage,what must be the price of a European put on RBC with an exercise price of $85?


A) $4.83
B) $3.15
C) $1.47
D) $4.71
E) $2.59

Correct Answer:

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