Question
Suppose you look in the newspaper and see ABC trading at $60 per share. Calls on ABC with one month to expiration and an exercise
Suppose you look in the newspaper and see ABC trading at $60 per share. Calls on ABC with one month to expiration and an exercise price of $55 are trading at $6.50 each. Puts on ABC with one month to expiration and an exercise price of $65 are trading at $3.50 each. Are these prices reasonable? Explain. (Ignore transactions costs.
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Financial Management Principles And Practice
Authors: Timothy J. Gallagher, Joseph D. Andrew
3rd Edition
0131768824, 978-0131768826
