Q.1) An option has a strike price of USD 50. A cash dividend of USD 0.50 is announced with an ex-dividend date before th

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answerhappygod
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Q.1) An option has a strike price of USD 50. A cash dividend of USD 0.50 is announced with an ex-dividend date before th

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Q.1) An option has a strike price of USD 50. A cash dividend of
USD 0.50 is announced with an ex-dividend date before the end of
the life of the option. What effect does this have on the strike
price? Q.2) Under what circumstances does a European call on an
asset equal the price of a European put on the asset when both have
the same strike price and time to maturity? Express your answer in
terms of forwarding prices.
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