Given: C = $4.00, P = $6.00, S = $42, K = $45, T = 3 months,
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Given: C = $4.00, P = $6.00, S = $42, K = $45, T = 3 months, r = 8%. The option contracts are written on 100 units of the underlying asset. (Show work.)
What would you do to exploit these quotes? (List all transactions you would make.) What would be your riskless profit?
How could you synthetically sell a call option? What would be the cash flow from doing this? (i.e., What is the synthetic call premium?)
Related Book For
Fundamentals of Selling Customers for Life through Service
ISBN: 978-0077861018
13th edition
Authors: Charles M. Futrell
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