Question: 1) Given that all else is the same for the two options except for the strikes listed which option will have a higher value? a)

1) Given that all else is the same for the two options except for the strikes listed which option will have a higher value?

a) Put with a strike of 19 or

b) Put with a strike of 20 b.

2) Given that the 9-month forward is trading at 20 and the Call Option with a strike price of 19 is trading at 3, what is your estimate for the price of the 19 Put assuming interest rates are 0%?

3) If you consider very high annual interest rates of 30% compounded monthly, what is your new estimate of the price of the 19 Put when the 9-month forward is trading at 20 and the Call Option with a strike price of 19 is trading at 3?

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