A share of czyszyczysko company trades at the warsaw stock, Ask an Expert

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A share of Czyszyczysko company trades at the Warsaw stock exchange and it currently sells for 4000 Polish zloties (PLN). A one-year European put with exercise price of PLN 4000 sells for PLN 199. A one-year European call with exercise price of PLN 4172 also sells for PLN 199. The current risk free interest rate is 8% per annum continuously compounded. Find the range of prices of one share of Czyszyczysko one year from now for which purchasing a collar consisting of these two options produces a profit. Assume that investor has no transaction costs, and only pays a premium for any option purchased, and receives premium for any option written.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92412086

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