The market price of a European call is $3.00 and its Black-Scholes price is $3.50. The Black-Scholes
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The market price of a European call is $3.00 and its Black-Scholes price is $3.50. The Black-Scholes price of a European put option with the same strike price and time to maturity is $1.00. What should the market price of this option be? Explain the reasons for your answer.
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