Lets assume that you want to create a synthetic 3 month Treasury bill with maturity value of
Question:
Let’s assume that you want to create a synthetic 3 month Treasury bill with maturity value of 10,000. You are given the following information: The risk-free interest rate is 5 % and the stock pays 3 percent continuous dividend. Assume that a put option with 3 month maturity and $80 strike price costs $5.3 and the current stock price is $77. How many stocks do you need to purchase to create this T-bill? Round your answer to two digits.
Let’s assume that you want to create a synthetic 3 month Treasury bill with maturity value of 10,000. You are given the following information: The risk-free interest rate is 5 % and the stock pays 3 percent continuous dividend. Assume that a put option with 3 month maturity and $80 strike price costs $5.3 and the current stock price is $77. How many stocks do you need to purchase to create this T-bill? Round your answer to two digits.
Your answer
Let’s assume that you want to create a synthetic 3 month Treasury bill with maturity value of 10,000. You are given the following information: The risk-free interest rate is 5 % and the stock pays 3 percent continuous dividend. Assume that a put option with 3 month maturity and $80 strike price costs $5.3 and the current stock price is $77. How many stocks do you need to purchase to create this T-bill? Round your answer to two digits.