Given: Netflix is selling for $105 a share. A Netflix call option with one month until expiration and an exercise price of $118 sells for $2.50 while a put with the same strike and expiration sells for $15.10. Question: shown below (unsure of my answers, would like step-by-step help)
Given: Netflix is selling for $105 a share. A Netflix call option with one month until expiration and an exercise price of $118 sells for $2.50 while a put with the same strike and expiration sells for $15.10. Question: shown below (unsure of my answers, would like step-by-step help)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Given: Netflix is selling for $105 a share. A Netflix call option with one month until expiration and an exercise price of $118 sells for $2.50 while a put with the same strike and expiration sells for $15.10.
Question: shown below (unsure of my answers, would like step-by-step help)
Thank you in advance!
Transcribed Image Text:a. What is the market price of a zero-coupon bond with face value $118 and 1-month maturity? (Round your answer to 2 decimal
places.)
Market price
$
117.60
b. What is the risk-free interest rate expressed as an effective annual yield? (Round your answer to 2 decimal places.)
Risk-free interest rate
4.16 %
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