Describe the three most important points of the chapter in order of importance. Explain why they are important and how you chose the order of importance
The current price of ABC stock is $50. The term structure of interest rates (continuously compounded) is flat at 10%. What is the six-month forward
The current price of ABC stock is $50. The term structure of interest rates (continuously compounded) is flat at 10%. What is the six-month forward price of the stock? Denote this as F. The six-month call price at strike F is equal to $8. The six-month put price at strike