(Pricing a call and put) A stock traded for $25 today will, in 1 year, be worth...
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(Pricing a call and put) A stock traded for $25 today will, in 1 year, be worth either $35 or $20. If the interest rate is 3%:
a. What is the value today of a 1-year European call option on the stock with exercise price $30?
b. Calculate the value today of a 1-year European put option on the stock with exercise price $30.
c. Show that put–call parity holds: That is parts a and
b, show the following:
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Related Book For 
Principles Of Finance Wtih Excel
ISBN: 9780190296384
3rd Edition
Authors: Simon Benninga, Tal Mofkadi
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