Question: please solve this question without using excel and show all steps. 7 7. An investor constructs a ratio spread on a stock using 1-year call
7 7. An investor constructs a ratio spread on a stock using 1-year call options. She buys one 75-strike option and sells two 90-strike options. You are given: (1) The continuously compounded annual risk-free interest rate is 0.03. (ii)Call option prices are 7.19 for a 75-strike option and 3.12 for a 90-strike option. Let S be the price of the stock at the end of one year. Determine the range of S for which profit is positive
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