Assume zero interest rates and no dividends. The 1-year TSLA call option at K=400 is priced at

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Assume zero interest rates and no dividends. The 1-year TSLA call option at K=400 is priced at $140, and the 1-year TSLA put option at the same strike is priced at $88.

(i) Based on put-call parity, infer the 1-year forward price on TSLA .

(ii) What is the present value of a 1-year forward on TSLA with delivery price of 400? (value for one share, not 100 shares)

(iii) What's the intrinsic value and time value of the call option?

(iv) What is the intrinsic value and time value of the put option? (v) Which option is in-the-money?

Related Book For answer-question

Investments An Introduction

ISBN: 978-0324561388

9th Edition

Authors: Herbert B Mayo

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Posted Date: May 03, 2023 12:40 AM

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Assume zero interest rates and no dividends. The 1-year TSLA call option at K=400 is priced at

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i Based on putcall parity the 1year forward price on TSLA can be inferred as Forward price Call pric... View the full answer

Investments An Introduction

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