Question
Consider the two strategies below: Strategy A: Long a call option with X1 = $20 and long a put option with X2 = $30 Strategy
Consider the two strategies below:
Strategy A: Long a call option with X1 = $20 and long a put option with X2 = $30 Strategy B: Long a put option with X1 = $20 and long a call option with X2 = $30
All the options have the same maturity and they are used on the same stock. Further assume that the firm pays no dividend.
Which strategy is more expensive to construct?
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International Financial Management
Authors: Cheol Eun, Bruce G. Resnick
2nd Edition
0072318252, 9780072318258
