Find the current value of a portfolio

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The price of an American call on a non-dividend-paying stock is $4.

The stock price is $31, the strike price is $30, and the expiration date is in 3 months. The risk-free interest rate is 8%.

-Find the upper and lower bounds for the price of an American put on the same stock with the same strike price and expiration date

-Determine the upper and lower bounds of a European call on the same stock with a strike price of $30 and expiration date in 3 months

In which circumstances a European call option has a lower value than a long position on a forward contract. Explain.

Is there any way to replicate the value of a forward contract using European options? Explain.

Find the current value of a portfolio including one European call and one European put with the same strike price and maturity

Reference no: EM132795927

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