You take out options contracts to sell a call and buy a put, both at the exercise
Question:
You take out options contracts to sell a call and buy a put, both at the exercise price of 55p, exercisable one year hence. The cost of the put is 7p and the cost of the call is 1p.
The current share price is 44p and the risk-free interest rate is 10 per cent.What is the present value of the exercise price?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answered By
Loise Ndungu
I have five years of experience as a writer. As I embark on writing your papers from the prologue to the epilogue, my enthusiasm is driven by the importance of producing a quality product. I put premium product delivery as my top priority, as this is what my clients are seeking and what makes me different from other writers. My goal is to craft a masterpiece each time I embark on a freelance work task! I'm a freelance writer who provides his customers with outstanding and remarkable custom writings on various subjects. Let's work together for perfect grades.
82+ Reviews
236+ Question Solved
Related Book For 
Corporate Finance And Investment Decisions And Strategies
ISBN: 9780273695615
5th Edition
Authors: Richard Pike, Bill Neale
Question Posted:
