Put-call parity
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Question attached in excel.
On June 25th, the call premium on a Dec 25 PHLX contract is 6.65 cents per pound at a strike price of $1.81. The 180-day interest rate is 7.5% in London and 4.75% in New York. If the current spot rate is 1 pound sterling = $1.8470 and the put=call parity holds, what is the put premium on a December 25 PHLX pond contract with an exercise price of $1.81?
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Solution Summary
The solution calculates the put premium using Put-call parity.
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On June 25th, the call premium on a Dec 25 PHLX contract is 6.65 cents per pound at a strike price of $1.81.
The 180-day interest rate is 7.5% in London and 4.75% in New York. ...
Purchase this Solution
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