h) discuss the relationship between the prices of puts, calls, and forward/futures contracts on the same underlying asset using the put-call-forward/futures parity. i) discuss the boundary conditions on the prices of American and European call option contracts on futures. j) explain and discuss the use of interest rate parity in pricing foreign currency forwards and futures. k) describe how spot prices are determined using the cost-of-carry model.
h) discuss the relationship between the prices of puts, calls, and forward/futures contracts on the same underlying asset using the put-call-forward/futures parity. i) discuss the boundary conditions on the prices of American and European call option contracts on futures. j) explain and discuss the use of interest rate parity in pricing foreign currency forwards and futures. k) describe how spot prices are determined using the cost-of-carry model.
ChapterP1: Part 1: Integrative Problem: The International Financial Environment
Section: Chapter Questions
Problem 5Q
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h) discuss the relationship between the prices of puts, calls, and forward/futures contracts on the same underlying asset using the put-call-forward/futures parity.
i) discuss the boundary conditions on the prices of American and European call option contracts on futures.
j) explain and discuss the use of interest rate parity in pricing foreign currency forwards and futures.
k) describe how spot prices are determined using the cost-of-carry model.
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