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24-11-2022
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universal fence stock is selling for $41 per share. a 6-month call on the stock with a strike price of $45 is priced at $1.60. risk-free assets are currently returning .15 percent per month. what is the price of a 6-month put on the stock with a strike price of $45?

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Tutorconsortium410 Tutorconsortium410

02-12-2022

We will apply the Put-Call parity equation where a 6-month call on the stock with a strike price of $45 is priced at $1.60.

What does the strike price of an option mean?

The price at which a put or call option may be executed is referred to as the option's striking price. Another term for it is the workout cost. The strike price is one of the two critical decisions a trader or investor must make when deciding on an option (the other being the period to expiration).

Who determines the striking price?

Strike prices are frequently determined by options exchanges like the Chicago Board Options Exchange and the New York Stock Exchange (NYSE) (CBOE). The correlation between the strike price and the spot price is one of many factors that affect an option's premium (how much it costs to purchase the option).

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