How you would create synthetic call option and identify cost

Reference no: EM13926125

Using BSMbin8e.xls, compute the call and put prices for a stock option, where the current stock price is $100, the exercise price is $100, the risk- free interest rate is 5 percent (continuously compounded), the volatility is 30 percent, and the time to expiration is 1 year. Explain how you would create a synthetic call option and identify the cost.

Reference no: EM13926125

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