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Explanation:

The correct answer is B.

Using the put-call parity equation:

$S_0 + P = C + X(1 + r)^{-T}$

$P = C + X(1 + r)^{-T} - S_0$

$P = 10 + 71 \times (1.07)^{-1} - 60 = 16.35514 \approx 16.36$

Where:

$S_0$ = Current stock price = $60
$C$ = Call option price = $10
$X$ = Exercise price = $71
$r$ = Risk-free rate = 7%
$T$ = Time to maturity = 1 year

The put option price is approximately $16.36.

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Q.3413 A stock is currently trading at $60 per share. A European call option having an exercise price of $71 and one year to maturity is currently trading at $10. If the risk-free rate is 7%, per annum, then what is the put option price? | Financial Risk Manager Part 1 Quiz - LeetQuiz