Demonstrate that an at-the-money call option on a given stock must cost more than an at-themoney put

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Demonstrate that an at-the-money call option on a given stock must cost more than an at-themoney put option on that stock with the same expiration. The stock will pay no dividends until after the expiration date. (Hint: Use put-call parity to show that C0 − P0 must be positive.) P-639

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ISE Investments

ISBN: 9781266085963

13th International Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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