Same stock with the same exercise price and expiration

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a. The stock price of Harper Corp. is $33 today. The risk-free rate of return is 6%, and Harper Corp. pays no dividends. A put option on Harper Corp. stock with an exercise price of $30 and an expiration date 73 days from now is worth $.95 today. A call option on Harper Corp. stock with an exercise price of $30 and the same expiration date should be worth __________ today.

b. Suppose you purchase a call and write a put on the same stock with the same exercise price and expiration. If prices are at equilibrium, the value of this portfolio is ________.

A) S0 - Xe-rt B) S0 - X

C) S0 + Xe-rt D) S0 + X

c. In a defined contribution pension plan, the _____ bears all of the fund's investment performance risk.

A) employer

B) employee

C) fund manager

D) government

Reference no: EM131563486

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