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[1] (Put Call Parity with the Present Value ofKnown Dividend D) Let D be the present value of the known dividend(s) on or prior to
[1](Put Call Parity with the Present Value ofKnown Dividend D) Let D be the present value of the known dividend(s) on or prior to time T, which is the expiration of a European option.
a)Using non-arbitrage argument, prove
whereis the underlying stock price;is the strike price;is the continuously compounded interest rate;is a European call option price; andis a European put option price.
b)Using non-arbitrage argument, prove
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