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1. Suppose a trader buys a call option with a strike price of $30 and a premium of $3.03. When the option was purchased (three months previous), the stock traded for $31/share. At expiration, the stock traded for $38/share. What is the traders net profit or loss, per share? (Type just the number to two decimal places in the response box, without commas, dollar signs or percent signs. Do not enter commas but use negative sign if necessary

2. Use put-call parity to answer this problem. A stock pays no dividend and trades for $50 per share. The riskless rate is 2.2%. A European call option with an exercise price of $45 and expiring in 10 months trades for $10. The fair price of a European put option with the same terms trade is_______. (Type just the number to two decimal places in the response box, without commas, dollar signs or percent signs.

Financial Management, Finance

  • Category:- Financial Management
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