Question
16. The quoted price of shares of company GAME TECHNOLOGY is 29$ today. The price of a call option on the same share is 8$,
16. The quoted price of shares of company GAME TECHNOLOGY is 29$ today. The price of a call option on the same share is 8$, with a strike of 33$. The price of a put option on the same share is 12$, with a strike of 33$. If the call and the put have the same expiration date, the face value and repayment of a bond with the same expiration date is 33$, with a price of 28$, which of the following statements is true (only one). a. Put-call parity holds. b. Put-call parity doesn't hold. Then the investment strategy to follow is to buy the stock and the put, to sell the call and short sell the bond. c. Put-call parity doesn't hold. Then the investment strategy to follow is to buy the call, buy the bond, buy the put and short sell the share. d. Put-call parity doesn't hold. Then the investment strategy to follow is to buy the call, buy the bond, sell the put and short sell the share.
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