Question: Assume there is no arbitrage unless otherwise stated. Facebook (FB) currently trades at $191.00. You purchase a 12 month European $4.00 strike call option on
Assume there is no arbitrage unless otherwise stated. Facebook (FB) currently trades at $191.00. You purchase a 12 month European $4.00 strike call option on a short futures contract on one share of FB. The futures delivery date is 25 months from now and the delivery price is $225.00. The risk-free rate is 5%. Compute the range of prices of FB 12 months from now that will make you want to exercise your option. Enter your solution in the form of a coordinate pair accurate to two decimal places, e.g. (123.45, 678.90). Do not include dollar symbols ($) in your solution. Assume there is no arbitrage unless otherwise stated. Facebook (FB) currently trades at $191.00. You purchase a 12 month European $4.00 strike call option on a short futures contract on one share of FB. The futures delivery date is 25 months from now and the delivery price is $225.00. The risk-free rate is 5%. Compute the range of prices of FB 12 months from now that will make you want to exercise your option. Enter your solution in the form of a coordinate pair accurate to two decimal places, e.g. (123.45, 678.90). Do not include dollar symbols ($) in your solution
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