Question
Need help with this finance question. Please show work in Excel. Thanks! The spot price of some asset that pays no dividends and costs nothing
Need help with this finance question. Please show work in Excel. Thanks!
The spot price of some asset that pays no dividends and costs nothing to own is $100. The risk-free rate of interest is 3% per year. The one-year futures price of this asset is $103. European call and put options on this underlying asset are also available with a strike price of $103 and an expiration date of one year. You decide to buy a call on the underlying asset and sell a put (again, both options have X = $103 and both expire in one year). What is the net cost to you of buying the call and selling the put?
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