Consider the information for the call given earlier. Since the BlackScholes model uses continuous interest, the discount
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Consider the information for the call given earlier. Since the Black–Scholes model uses continuous interest, the discount factor is expressed in continuous form. It is equal to ert or e0.10(0.5). Using a calculator, this value is 1.0513. Therefore,
Price of put = 3.95 - 40 + 45/1.0513 = $6.75
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Calculating the Put Price Discount Factor Calculate the continuous d...View the full answer
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Related Book For
Investments Analysis And Management
ISBN: 9781118975589
13th Edition
Authors: Charles P. Jones, Gerald R. Jensen
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