Financial Risk Manager Part 1

Ultimate access to all questions.

Explanation:

Using European put-call parity with dividends:

C + K e^{-rT} + PV(D) = P + S

So,

PV(D) = P + S - C - K e^{-rT}

Substitute the values:

PV(D) = 5.36 + 44.00 - 8.95 - 40 e^{-0.03 \times 0.75}

40 e^{-0.0225} \approx 39.11

PV(D) = 49.36 - 48.06 = 1.30

Therefore, the present value of expected dividends is $1.30.

Explanation:

Using European put-call parity with dividends:

C + K e^{-rT} + PV(D) = P + S

So,

PV(D) = P + S - C - K e^{-rT}

Substitute the values:

PV(D) = 5.36 + 44.00 - 8.95 - 40 e^{-0.03 \times 0.75}

40 e^{-0.0225} \approx 39.11

PV(D) = 49.36 - 48.06 = 1.30

Therefore, the present value of expected dividends is $1.30.

Comments (0)

No comments yet.

Exam-Like

Community

MManit

Last updated: May 2, 2026 at 14:02

Zero

0.0%

$0.19

16.7%

$1.30

83.3%

$4.75