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Question 3 Derive a pricing formula for a forward-start put option on a dividend yield-paying stock, with dividend yield y, in which the strike price

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Question 3 Derive a pricing formula for a forward-start put option on a dividend yield-paying stock, with dividend yield y, in which the strike price will be greater than the spot price at T1, the time the option 'starts', by a factor of a (that is K = (1 + a )STI). Type your derivation here (6 marks)

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