Question
Todays price of AMZN is $1, 900 per share. You are interested in a bear put spread on AMZN with one year until maturity. You
Todays price of AMZN is $1, 900 per share. You are interested in a bear put spread on AMZN with one year until maturity. You ask an option dealer to provide quotes on AMZN options with one year until maturity. For a European put option with a strike of $2000, the dealer quotes you a price of $323.77. For a European put option with a strike of $1, 800, the dealer quotes you a price of $210.03. The c.c. risk-free interest rate is zero percent. When does your bear put spread break even on its investment? Input your answer in terms of the stock price in one year (e.g., $1, 900). Round your answer to three decimal places.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started