Corporate Finance Assignment/ Professional Essay Writers
May 7th, 2020
The current price of a stock is 43. An investor buys the 1-year 43-strike call for 5.71 and sells the 1-year 43-strike put for 4.44. The stock pays no dividend. At the same time, she buys the 1-year 47-strike put for 6.96 and sells the 1-year 47 strike call for 4.08.
a) What the investor creates by these positions? what is the reason?
b) Find the annual effective risk-free interest rate (i.e. the risk-free rate of return). Get Finance Help Today