Question
You are working on the options trading desk of FINM Investment Bank. Six-month European call and puts on stock BUSN with strike $56 are selling
You are working on the options trading desk of FINM Investment Bank. Six-month European call and puts on stock BUSN with strike $56 are selling for $2 and $5, respectively. BUSN is currently trading at $51 and does not pay dividends. The interest rate is 2% p.a.c.c.Are you able to make an immediate and riskless profit without any out-of-pocket expenses? If so, show all steps and calculations for the entire duration of your strategy.
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Personal Finance
Authors: Jeff Madura, Hardeep Singh Gill
3rd Canadian Edition
978-0133035575, 133035573, 978-0133970524, 133970523, 978-0134040042
