Overview
10.11. Describe the terminal value of the following portfolio: a newly entered-into long forward contract
on an asset and a long position in a European put option on the asset with the same maturity as the
forward contract and a strike price that is equal to the forward price of the asset at the time the
portfolio is set up. Show that the European put option has the same value as a European call option with
the same strike price and maturity.
10.18. ‘‘If most of the call options on a stock are in the money, it is likely that the stock price has risen
rapidly in the last few months.’’ Discuss this statement