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
Posted: Thu May 05, 2022 7:57 am
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.
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.