(Mark Value = 4) 8. A trader shorts one share of a stock index for 45 and buys a 60-strike European call option on that
Posted: Sat Feb 26, 2022 9:12 am
(Mark Value = 4)
8. A trader shorts one share of a stock index for 45 and buys a
60-strike European call option on that stock that expires in 2
years for 5. Assume the annual effective risk-free interest rate is
3%. The stock index increases to 85 after 2 years.
Calculate the profit on your combined position, and determine an
alternative name for this combined position.
show work
8. A trader shorts one share of a stock index for 45 and buys a
60-strike European call option on that stock that expires in 2
years for 5. Assume the annual effective risk-free interest rate is
3%. The stock index increases to 85 after 2 years.
Calculate the profit on your combined position, and determine an
alternative name for this combined position.
show work