please abswer question 4

risk free rate = 6.092%

please show how to make graphs

6.09 4. As an option trader, you are constantly looking for opportunities to make an arbitrage transaction (ie, a trade in which you do not need to commit your own capital or take any risk but can still Stock make a profit). Suppose you observe the following prices for options on GHI Costock 53.18 for Bord a call with an exercise price of $60 and 51 18 for a put with an exercise price of $60. Both options expire in exactly six months, and the price i s month Teball is $97.00 (for face value of S100). a. Using the put-call-spot parity condition, demonstrate graphically how you could . A l l ) Synthetically recreate the payoll structure of a share of GHI stock in six months using a Buy Cut) combination of puts, calls, and T-bills transacted today Benchy Given the current market prices for the two options and the bill, calculate the no. Put call parity arbitrage price of a share of GHI stock. a) If the actual market price of GHI stock is $60, demonstrate the arbitrage transaction you 3.18 - 3.5326 60e, could create to take advantage of the discrepancy. Be specific as to the positions you 5. 73.165,38 1600 would need to take in each security and the dollar amount of your profit hort Langs. You are currently managing a stock portfolio worth $55 million and you are concerned that over amit values will be flat and may even fall. Consequently, you are 6.09 4. As an option trader, you are constantly looking for opportunities to make an arbitrage transaction (ie, a trade in which you do not need to commit your own capital or take any risk but can still Stock make a profit). Suppose you observe the following prices for options on GHI Costock 53.18 for Bord a call with an exercise price of $60 and 51 18 for a put with an exercise price of $60. Both options expire in exactly six months, and the price i s month Teball is $97.00 (for face value of S100). a. Using the put-call-spot parity condition, demonstrate graphically how you could . A l l ) Synthetically recreate the payoll structure of a share of GHI stock in six months using a Buy Cut) combination of puts, calls, and T-bills transacted today Benchy Given the current market prices for the two options and the bill, calculate the no. Put call parity arbitrage price of a share of GHI stock. a) If the actual market price of GHI stock is $60, demonstrate the arbitrage transaction you 3.18 - 3.5326 60e, could create to take advantage of the discrepancy. Be specific as to the positions you 5. 73.165,38 1600 would need to take in each security and the dollar amount of your profit hort Langs. You are currently managing a stock portfolio worth $55 million and you are concerned that over amit values will be flat and may even fall. Consequently, you are