Question
Suppose you are given the following prices: Current stock price is $41. Call(X=40)=$4.5, Call(X=45)=$3, Put(X=$45)=$3, Put(X=$40)=$2, T=1 year, risk-free interest rate=5%. All options are American
Suppose you are given the following prices: Current stock price is $41. Call(X=40)=$4.5, Call(X=45)=$3, Put(X=$45)=$3, Put(X=$40)=$2, T=1 year, risk-free interest rate=5%. All options are American type. Is there a profit opportunity based on these prices? If so, what would you do? If not, why not?
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FINA 6201 Financial Theory And Policy Emery Trahan
Authors: Emery Trahan
1st Edition
1609270754
