Question
On 1st October, stock OINK that pays a dividend of 8% p.a. twice a year (September and March) is currently traded at 95 EUR. The
On 1st October, stock OINK that pays a dividend of 8% p.a. twice a year (September and March) is currently traded at 95 EUR. The risk-free interest rate is 10% and March put with strike 105 EUR has a premium of 15 EUR.
- Is the option in-the-money or out-of-the-money?
- What is the intrinsic and extrinsic (time) value?
- What is the maximum loss of the portfolio (long stock + long put)?
- What is the maximum profit of the portfolio? why
please explain step by step and add the formulas
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Finance Of International Trade
Authors: Eric Bishop
1st Edition
0750659084, 978-0750659086
