Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Call-Put Parity
P + S = C + E * [1/(1+i)] ^n where:
P = the market price of the put S = the market price of the stock C = the market price of the call E = the exercise price of both the call and the put i = the risk free rate ( taken as 5.5 %) n = the number of years until the expiration date of the options
Thus, if P + S > C + E * [1/(1+i)] ^n, you should buy calls because their value must increase for the equation to balance.
On the other hand if P + S < C + E * [1/(1+i)] ^n, you should buy puts.
For Example -
For the March series, we find Call Option should be purchased for strike prices of Rs. 720 and 740.
Strike Price
Difference
720
18.19
740
5.74
For the March series, we find Put Option should be purchased for strike prices of Rs. 760, 780, 800, 820, 840, 860, 880 and 900.
760
15.3
780
4.25
800
4.89
820
2.1
840
3.79
860
4.84
880
9.79
900
32.64
LENDING RATES IN THE CREDIT MARKET One of the crucial decisions involved while extending loans is the lending rate. Intermediaries will base their lending rate decisions on thr
How Compound values can be calculated on anannual basis Compound values can be calculated on anannual basis, or on a half-yearly basis or on a monthly basis or on continuous ba
Question: a. Explain what the debt overhang problem is (following the lines of Myers 1977) make sure that you specify what the relevant conflict of interest is and what are the
Enumerate the Present Value of an Annuity Present value of an annuity can be calculated by: Present Value = A [ {(1+i) n -1} / i (1+i) n ] Or to use the tables change
Evergreen Company Ltd has been promoted by promoters. They are trying to decide how the company could be financed. There are three choices: i. Issue Rs 500,000 in Equity shares
Venture capitalist is an organization in the practice of providing capital to fledgling organization with high growth potential in exchange for equity stakes and/or management cont
ABC Ltd. Produces electronic components with a selling price per of Rs.100. Fixed cost amount to Rs.2,00,000/- 5000 units are produced and sold each year. Annua
What is the time value of money? The time value of money signifies that money you hold in your hand today is worth more than money you expect to receive in the future. Likewise
Types of asset-backed securities 1. Auto Loan-Backed Securities (ALBs) 2. Credit Card Receivab
#questi Saven Travel Corporation is considering several investment opportunities in order to diversify its operations. Mr. Saven, president, is trying to determine the firm''''s co
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd