a. Using put-call parity and the data in Figure 16.6, at what stock price will the call
Question:
a. Using put-call parity and the data in Figure 16.6, at what stock price will the call and the put have the same value?
Figure 16.6
b. In Figure 16.7, why do the call and the put both have a value of zero at expiration?
Figure 16.7
Transcribed Image Text:
FIGURE 16.6 Input values: K = $100 T = 1/4 year r = 5% o = 25% Put and Call Option Prices Option price ($) 25 20 15 10 5 T 1 T T % Put price 102 104 Stock price ($) 106 Call price 108 110 112 114 116 120 118
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Related Book For
Fundamentals Of Investments Valuation And Management
ISBN: 9781266824012
10th Edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
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