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1. A stock has an initial value of $7, and can go up by 1.2 or down by 0.7, the risk free rate is 0.13%

1. A stock has an initial value of $7, and can go up by 1.2 or down by 0.7, the risk free rate is 0.13% per period. Calculate the price of a put and a call option with exercise price $6 and three periods to maturity.

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