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The common stock of Texas Energy Company is selling at $90. A 1-year call option written on Texass stock is selling for $8. The calls
The common stock of Texas Energy Company is selling at $90. A 1-year call option written on Texass stock is selling for $8. The calls exercise price is $100. The risk-free interest rate is 1% per year. Suppose that puts on Texas stock are not tradable, but you want to hold one. How would you do it? Suppose that puts are traded, what should a 1- year put with an exercise price of $100 sell for?
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