Friday, April 10th, 2015

Please help options question!?

The price of an American option on a non-dividend paying stock is $ 2. 90. The stock price is $ 15. 00, the exercise price is $ 14. 00 and the expiration date of the American call is 8 months. The risk-free rate of interest is 20% p. a. (Continuously compounded). Required: (A) Calculate the upper and lower limit for the price of an American put option in the same population with the exercise price and the same date of the put option vencimiento.Si was selling American or placing on the market b $ 2. 10, indicate how you would exploit any arbitrage opportunity. Suppose that short sales are allowed (if necessary) and ignore the transaction costs to implement the strategy of arbitration.

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One Response to “Please help options question!?”
  1. lifewithrye says:

    I think you should not have us doing your HOMEWORK…

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