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Temex Food stock currently sells for $48. A call o...

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Temex Food stock currently sells for $48. A call option on this stock is available, with a strike price of $45 and an expiration date six months in the future. The standard deviation of the stocks return is 45%, and the risk free interest rate is 4%. Calculate the value of the call option. Next, use the put-call parity to determine the value of a Temex put option that also has a $45 strike price and 6 months until expiration.

 

Paper#10258 | Written in 18-Jul-2015

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