Question
2. Suppose the interest rate is r=.06 per year compounded continuously and the current value of an asset, S, is $100. a).What is the lower
2. Suppose the interest rate is r=.06 per year compounded continuously and the current value of an asset, S, is $100.
a).What is the lower bound for C110 with expiration date 1 year from now.
b). Suppose C110 costs $3 with expiration date1year from now. How much is P110?
c). Suppose C90P90 = $15 with expiration date. 5year from now. What strategy should you adopt? How much money can you make?
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International Economics
Authors: Thomas A. Pugel
15th edition
73523178, 978-0077769529, 007776952X, 978-0073523170
