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Suppose the annual effective interest rate is 8%. What is the profit in 1 year for stock prices of $40, $50 or $55? Suppose you
Suppose the annual effective interest rate is 8%. What is the profit in 1 year for stock prices of $40, $50 or $55? Suppose you enter into a short 1 year forward position at a forward price of $50 today; Suppose you buy a $50-strike call with 1 year expiration at premium $1.12; Suppose you buy the stock at $50 today; Suppose you sell a $50-strike put with 1 year expiration at premium $1.32
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