Question
You buy a call with a strike price of $33 and sell an identical put. The call has a premium of $8.68 and the put
You buy a call with a strike price of $33 and sell an identical put. The call has a premium of $8.68 and the put has a premium of $5.60. You also sell a call with a strike price of $36 and buy an identical put. This call has a premium of $7.60 and this put has a premium of $6.98. The risk-free rate in the economy is 3.85%. All 4 options are written on the same underlying asset and expire in exactly one year. If the primary asset is worth $37.38 when the options all expire, what is your net percentage return? Take your answer out to four decimals - for example, write 4.24% as .0424.?
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