Question
A European call option and put option with strike prices of $20 and maturity 3 months both sell for $3.0. The risk free rate is
A European call option and put option with strike prices of $20 and maturity 3 months both sell for $3.0. The risk free rate is 10% continuously compounded, the stock price is $20. The stock pays no dividends. Identify the arbitrage opportunity.
Repeat the previous problem but now assume the stock pays a dividend of 1 dollar in two months. All the other parameters remain the same.
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Contemporary Financial Management
Authors: R. Charles Moyer, William J. Kretlow, James R. Mcguigan
8th Edition
0324065914, 9780324065916
