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1 (a). A put option with an exercise price of $17 that expires in 4 months currently costs $3. The stock price is currently $18
1 (a). A put option with an exercise price of $17 that expires in 4 months currently costs $3. The stock price is currently $18 and the risk-free rate of return is 0.04. What is a call option worth (same exercise price and expiry)?
(b) Draw the profit diagram (at expiry) for the put option from part (a)
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