(PCP finding S0 ) A European put and a call option both expire in a year and...
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(PCP finding S0
) A European put and a call option both expire in a year and have the same exercise price of $20. The options are currently traded at the same market price of $3. Assume that the annual interest rate is 2%.
a. What is the current stock price?
b. In general: If a European put and a call have the same price and expire at the same time, what can you say about the relationships between the stock price and the exercise price. S > X? S < X? S = X?
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Related Book For 
Principles Of Finance Wtih Excel
ISBN: 9780190296384
3rd Edition
Authors: Simon Benninga, Tal Mofkadi
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