The exercise price of the options is $100 per share, all options are european and the stock does not pay any dividend. the call price is $25 per share and the put price is $17 per share. both options mature in 2 years. finally, the annual rate of interest is 5% with continuous compounding. what is the stock price today?

Stock Price is $98.70

Explanation:

given data

exercise price = $100 per share

call price = $25 per share

put price = $17 per share

mature time = 2 years

annual rate of interest = 5%

to find out

What is the stock price today

solution

we will use here Put Call Parity for find out Stock Price that is express as

C + = S + P    .....................1

here C is call price and r is rate and t is time and S is Stock Price and P is put price so put all value in equation 1

C + = S + P

25 + = S + 17

solve it we get

P = $98.70

so Stock Price is $98.70

answer; planning;

answer///supply is elastic, and demand is inelastic;