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
CONCEPTS OF WORKING CAPITAL There are two concepts of Working Capital - Net working capital and Gross Working capital. 1. Gross Working Capital Gross Working capital re
Which of these two methods is better: discounting the Equity Cash Flow or discounting the Free Cash Flow? The results we get by discounting the Equity Cash Flow and the Free Ca
Q. What is Cash Credit? A cash credit is an arrangement by which a bank allows his customer to borrow money up to a certain limit against some tangible securities or guarantees
The authority and duties of members (shareholders) Members and shareholders shall together and severally protect, conserve and actively exercise the supreme authority of the co
Corporate Governance features Corporate compliance: The BOD should make sure that corporation obeys with all related laws, governance practices, regulations, accounting an
How does price serve as a signal to resource owners? While consumers decide that a good or service is much more appealing than before, demand rises. This makes a shortage at the
Which currency has to be used in an international acquisition in order to calculate the flows? It can be completed in the local currency or in the currency of the parent compan
What is the difference between the Euronote market, the Euro-medium-term-note market, and the Eurocommercial paper market? Answer: Euronotes are short-term notes guarantees by
Cash Books (Cash Payments and Receipts Journals) Cash books are the names given to the Cash Receipts Journal and the Cash Payments Journal. They are used to record the flow of
Talbot Enterprises recently reported an EBITDA of $8 million and net income of $2.4 million. It had $2.0 million of interest expense, and its corporate tax rate was 40%. What was i
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