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The common stock of Triangular File Company is selling at $104. A 39-week call option written on Triangular File's stock is selling for $22. The
The common stock of Triangular File Company is selling at $104. A 39-week call option written on Triangular File's stock is selling for $22. The call's exercise price is $114. The risk-free interest rate is 6% 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? Buy call, invest PV(EX), sell stock short Sell call, invest PV(EX), sell stock short Buy call, lend PV(EX), buy stock Sell call, lend PV(EX), buy stock b. Suppose that puts are traded. What should a 39-week put with an exercise price of $114 sell for? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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