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today's price of pro and gamble (pg) is $120 per share. you are mildly bearish about pg in the near future. to implement your view,
today's price of pro and gamble (pg) is $120 per share. you are mildly bearish about pg in the near future. to implement your view, you decide to purchase a bear put spread with six months until maturity. an option dealer provides you quotes on six-month pg options. for a put option with a strike of $115, the dealer quotes you a price of $6.01. for a put option with a strike of $95, the dealer quotes you a price of $0.82. the c.c. risk-free rate is zero.
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