1.
Using put call parity
Present value or Price of bond=S+P-C=100+11.25-2.40=108.85
2.
=(109/108.85)^12-1
=1.66624%
Netflix is selling for $100 a share. A Netflix call option with one month until expiration...
Netflix is selling for $100 a share. A Netflix call option with one month until expiration and an exercise price of $111 sells for $2.40 while a put with the same strike and expiration sells for $12.18. a. What is the market price of a zero-coupon bond with face value $111 and 1-month maturity? a. What is the market price of a zero-coupon bond with face value $111 and 1-month maturity b. What is the risk-free interest rate expressed as...
Netflix is selling for $105 a share. A Netflix call option with one month until expiration and an exercise price of $121 sells for $2.30 while a put with the same strike and expiration sells for $17.40. a. What is the market price of a zero-coupon bond with face value $121 and 1-month maturity? (Round your answer to 2 decimal places.) Market price b. What is the risk-free interest rate expressed as an effective annual yield? (Round your answer to...
Netflix is selling for $105 a share. A Netflix call option with one month until expiration and an exercise price of $121 sells for $2.30 while a put with the same strike and expiration sells for $17.40. a. What is the market price of a zero-coupon bond with face value $121 and 1-month maturity? (Round your answer to 2 decimal places.) Market price b. What is the risk-free interest rate expressed as an effective annual yield? (Round your answer to...
Netflix is selling for $105 a share. A Netflix call option with one month until expiration and an exercise price of $116 sells for $2.30 while a put with the same strike and expiration sells for $13.10. a. What is the market price of a zero-coupon bond with face value $116 and 1-month maturity? (Round your answer to 2 decimal places.) b. What is the risk-free interest rate expressed as an effective annual yield? (Round your answer to 2 decimal...
Please do 5B
Netflix is selling for $100 a share. A Netflix call option with one month until expiration and an exercise price of $105 sells for $2 while a put with the same strike and expiration sells for $6.94. a. What is the market price of a zero-coupon bond with face value $105 and 1-month maturity? (Round your answer to 2 decimal places.) 3.85/7.69 points awarded Market price $ 104.94 Scored b. What is the risk-free interest rate expressed...
A stock's current price is $72. A call option with 3-month maturity and strike price of $ 68 is trading for 6, while a put with the same strike and expiration is trading for $20. The risk free rate is 2%. How much arbitrage profit can you make by selling the put and purchasing a synthetic put? (Provide your answer rounded to two decimals.) You have purchased a put option for $ 11 three months ago. The option's strike price...
Using the Put-Call Parity relationship, find the value of a put option (same strike, expiration as the call option) using the following information: Current stock price $33 risk-free rate 6% Call option strike price $32 Call option current value $6.56 Option time to maturity 1 years
ABS stock is selling for $30 a share. Price of a 6-month call option with a strike price of $32 is $0.50. Risk-free rate is 0.5% per month. What is the price of a 6-month put option with a strike price of $32?
Suppose that a call option with a strike price of $48 expires in one year and has a current market price of $5.15. The market price of the underlying stock is $46.24, and the risk-free rate is 1%. Use put-call parity to calculate the price of a put option on the same underlying stock with a strike of $48 and an expiration of one year. 1. The price of a put option on the same underlying stock with a strike...
4. A call option currently sells for $7.75. It has a strike price of $85 and seven months to maturity. A put with the same strike and expiration date sells for $6.00. If the risk-free interest rate is 3.2 percent, what is the current stock price? 5. Suppose you buy one SPX call option contract with a strike of 1300. At maturity, the S&P 500 Index is at 1321. What is your net gain or loss if the premium you...