A stock trades at 100 and offer a 5% annual dividend. Based on a risk free...
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A stock trades at 100 and offer a 5% annual dividend. Based on a risk free rate of 2% and a strike price of 90, a 1 year fair valued put option trades at 4.3599 and 1 year fair value call option trades at 11.2649. Using continuous compounding at what strike rate would the fair value of the put and call price be equal? A stock trades at 100 and offer a 5% annual dividend. Based on a risk free rate of 2% and a strike price of 90, a 1 year fair valued put option trades at 4.3599 and 1 year fair value call option trades at 11.2649. Using continuous compounding at what strike rate would the fair value of the put and call price be equal?
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