Question
For 9 & 10: The price for a call option contract on one standard Euro contract, at a strike price of $1.1100 per Euro at
For 9 & 10: The price for a call option contract on one standard Euro contract, at a strike price of $1.1100 per Euro at the expiry date in 12-months, is $400. The price for a put option contract on one standard Euro contract, at a strike price of $1.1150 at the expiry date in 12-months is $375.
9) Suppose the spot rate is $1.1090 per Euro. What is the difference between the time value of the call option subtract the time value of the put option? Round to the nearest cents.
10) Assume Jane sells a call and buy a put, borrows/invests the proceeds at annual rate 5%. Calculate her position (gain / loss), to nearest cents, assume the stock price is $1.1010 per Euro at maturity.
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