Question
Todays price of a non-dividend-paying stock is $1000 and the annual discretely compounded risk-free rate is given to be 5%. You write a one-year, $1,050-strike
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Todays price of a non-dividend-paying stock is $1000 and the annual discretely compounded risk-free rate is given to be 5%. You write a one-year, $1,050-strike Eureopan call option for a premium of $10 while you simultaneously buy the stock (assume you finance the stock purchase by borrowing at the risk-free rate). What is your profit if the stocks spot price in one year equals $1,200?
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Financial Markets And Technical Analysis
Authors: Eric Majors
1st Edition
1495333574, 978-1495333576
