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
1. The standard approach here is to calculate some conventional ratios. These ratios can afterwards be used along with regression analysis to estimate the default probability.
State the objectives of Corporate financial Corporate financial objectives could be to: 1. Provide the link between business and the other entities in environmentand 2.
Every business concern should have neigh adequate capital to run the business operations it should have neither redundant nor excess working capital non inadequate or Shortage of
Nominal spread of a non-treasury bond can be defined as the difference between the bond's yield and the yield to maturity of a benchmark treasury coupon security.
Is there an optimal capital structure? What is it and how can it be calculated? There is no optimal capital structure. Capital structure is a variable which depends on the incl
Q. What do you mean by Working Capital? Meaning of Working Capital:- Working capital management is a significant aspect of financial management. In business money is necessar
Following is the information furnished by a private port for investing Rs. 10 crore in a 20 Tonne Gantry Crane. The entire funding is from a loan carrying an interest of 11%. The l
What does the “weight” refer to in the weighted average cost of capital? The weight considered to in weighted average cost of capital consider the portion of the total capital in
Basics of Convertible Bonds The provision of conversion in a corporate bond entitles the bondholder the right to convert the bond into a predetermined number of shares of commo
What level of profits can you earn in a perfectly competitive market and what drives markets towards perfect competition over the long run?
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