Why does put-call parity not hold, when option is American
Why does put-call parity not hold, when option is American?
Expert
When the options are American, put–call parity does not hold, since the short position could be exercised against you, leaving you along with several exposures to the stock price. Thus we don’t know what we will be worth on expiration. Without dividends this is theoretically never optimal to exercise an American call before expiration, while an American put must be exercised when the stock falls low sufficient.
Where can a profitable strategy exist?
Explain another way of interpreting put–call parity.
5. What are the factors responsible for the recent surge in international portfolio investment? plz explain in 20 marks
Explain Poisson process in Brownian motion.
How is Value at Risk Used?
Normal 0 false false
Who gave the pricing of options to the simulation of random asset paths?
Explain the term Modigliani–Modigliani measure.
How could MBAs cope?
How Value at Risk simply calculated?
18,76,764
1926028 Asked
3,689
Active Tutors
1461383
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!