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2-a) By relying on arbitrage free assumption, show that for strike prices K1 < K2, both inequalities hold: 0 P A K2 P A K1
2-a) By relying on arbitrage free assumption, show that for strike prices K1 < K2, both inequalities hold: 0 P A K2 P A K1 K2 K1 We omitted (0, S(0);T) for brevity, as it is fixed. [Note that these are American contracts.]
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