Given a call and put with an exercise price of ($ 60), a risk-free discount bond with
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Given a call and put with an exercise price of \(\$ 60\), a risk-free discount bond with face value of \(\$ 60\) and the same maturity as the options' expiration:
a. Construct a table of expiration values (or cash flows) of a stock and put portfolio for stock values of \(\$ 40, \$ 50, \$ 60, \$ 70\), and \(\$ 80\).
b. Construct a table of expiration values (or cash flows) of a long bond and call values for stock values of \(\$ 40, \$ 50, \$ 60, \$ 70\), and \(\$ 80\).
c. Compare the cash flows for the stock and put portfolio with the call and bond portfolio. Comment on put-call parity.
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