Interest rates are zero. A European call with a strike price of $60 and a...
70.2K
Verified Solution
Link Copied!
Question
Finance
Interest rates are zero. A European call with a strike price of $60 and a maturity of one year is worth $6. A European put with a strike price of $60 and a maturity of one year is worth $7. The current stock price is $59. Which of the following is true?
A. The call price is high relative to the put price
B. Both the call and put are fairly priced
C. The put price is high relative to the call price
D. Both the call and put must be mispriced
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
