Question
Problem 20-16 Putcall parity The common stock of Triangular File Company is selling at $96. A 26-week call option written on Triangular Files stock is
Problem 20-16 Putcall parity
The common stock of Triangular File Company is selling at $96. A 26-week call option written on Triangular Files stock is selling for $14. The calls exercise price is $106. The risk-free interest rate is 8% per year. a. Suppose that puts on Triangular stock are not traded, but you want to buy one. Which combination will produce the same results?
multiple choice
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Buy call, invest PV(EX), sell stock short
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Sell call, invest PV(EX), sell stock short
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Buy call, lend PV(EX), buy stock
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Sell call, lend PV(EX), buy stock
b. Suppose that puts are traded. What should a 26-week put with an exercise price of $106 sell for? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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The Insiders Guide To Dol Plan Audits How To Survive An Employee Benefit Plan Audit
Authors: Frank J. Bitzer, Jr. Ferrigno, Nicholas W.
1st Edition
0872182711, 978-0872182714
