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What is the net present value of the trade

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Reference no: EM131586075

Based on this data:

Type of Option  Strike Price  Option Price

Call          $125        $13.50

Put           $125        $11.50

Call          $130        $11.35

Put           $130        $14.50

An investor is considering a strategy of buying the $125 Call and the $130 Put and Selling the $130 Call and the $125 Put. If the risk-free rate is 4.56% per year and the time remaining to expiration is 0.0959 years, should the investor execute the position? What is the net present value of the trade?

Reference no: EM131586075

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