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
what are the functions of money market
The Selling Process The four key elements that constitute the selling process are: (i) identification of prospective buyers, (ii) selection of the type of selling process to be
In the NPV analysis, sunk cost is not relevant whereas opportunity cost is for project evaluation. Requirements: Explain and justify the above statement about sunk cost and
Dividend Decision: The Dividend Decision is a decision taken by the directors of a company. It relates to the timing of any cash payments and amount made to the company's stoc
Problem: i) Assume a firm buys a new tooling machine for Rs 2000,000, installation costs net of taxes are Rs 300,000. An existing asset has a book value of Rs 400,000 and the
Q. Observation of capital structure? Droxfol Co has long-term funding provided by ordinary shares preference shares and loan notes. The rate of return necessary by each source
assume that risk free rate is 8% and expected rate of return in market is 12%. what is the required rate of return on stock with a beta of 0.8%
FACTORS INFLUENCING CAPITAL STRUCTURE/DETERMINANTS OF THE CAPITAL STRUCTURE 1. Financial leverage (or) Trading on equity it is the make use of long term fixed interest bea
Tests for Consistency The consistency of the index numbers have been tested over the years. The most important of these tests are: The time reversal test The
Jane has agreed to sell her Porshe 911 Cabriolet worth RM1.3 million to Lim for the price of RM 500,000. The decision was made rather hastily as Jane need money to pay her creditor
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