Hi sir This question states. True that there is no cash outlay at the initiation, but we calculate the price of future on pv of the future cash flows at Rf Which means value exceeds the price so kindly explain the questions ...
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If the underlying is at or nearing bankruptcy an American put may be exercised early why? And why not call?
Can anyone explain this equation of Put call forward parity for European options P+,F+& BOND1 + = C+,BOND2+
Please provide solution
What does non linearly payoff mean’s in ques 6 Explain.
In American call option if share is giving dividends it can be exercised today but how can call option pay dividends we are not buying the share we are just betting on share?
Please elaborate!!
Back side ans is option B
I wanted to know the concept of FRA in relation to zero value or non zero value at initiation??
Can anyone explain option A? How differences in cash flows result in different prices for forwards and futures?