The interest rate is 1.6% per annum with discrete annual compounding. You want to create a principal protected note with a maturity of one year that is guaranteed to payout at least $2000, and also provide the potential for some upside if the stock market does well. You buy a certain number of call options with an exercise price of $2000 to achieve your objective. That number need not be a whole number. What is the maximum dollar value of the call options that you can buy? Your answer should be correct to two decimal places.

Answer rating: 100% (QA)

Annual Interest Rate is 16 and Guaranteed Payout is 2000 Thertefore such amount s... View the full answer