The price of a European call that expires in six months and has a strike price of $50 is $5.
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The price of a European call that expires in six months and has a strike price of $50 is $5.
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The price of a European call that expires in six months and has a strike price of $50 is $5.
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The price of a European call that expires in six months and has a strike price of $50 is $5. The underlying stock price is $52, and a dividend of $1.00 is expected in three months. The term structure is flat, with all risk-free interest rates being 10%.
a. What is the price of a European put optio...
the price of a european call that expires in six months and has a strike price of 50 is 5
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The price of a European call that expires in six months and has a strike price of $50 is $5.
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The price of a European call that expires in six months and has a strike price of $50 is $5. The
underlying stock price is $52, and a dividend of $1.00 is expected in three months. The term struc
is flat, with all risk-free interest rates being 10%.
b) If put sells for 0.5 then it is advisable to buy the put and go short on the synthetic put
P = C + X/(1 + risk free rate)n - S
so buy stock, sell call and go short on the risk free asset with value equal to strike price
Arbitrage profit 2.45
European Put Price 0.5
1.95
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