Hi question here!
Maybe I confused something, but I think that the Put Call parity will result in different answers based on whether you chose to use prepaid forwards v forwards.
So my question is, in what case would you use prepaid forwards as opposed to the latter?
IE. (with cont. dividends) using Forwards
C-P = Se^(r-d)T -Ke-rT
and
C-P = Se^(-d)T - Ke^-rT using Prepaid
I don't see the questions specifying which one to use either. all help is appreciated, Thanks!
Maybe I confused something, but I think that the Put Call parity will result in different answers based on whether you chose to use prepaid forwards v forwards.
So my question is, in what case would you use prepaid forwards as opposed to the latter?
IE. (with cont. dividends) using Forwards
C-P = Se^(r-d)T -Ke-rT
and
C-P = Se^(-d)T - Ke^-rT using Prepaid
I don't see the questions specifying which one to use either. all help is appreciated, Thanks!
When to use prepaid forwards vs forwards?
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