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3. (10 pts) Suppose the stock S pays dividend at time to with to E (0, T). Let CA and PA be the prices of

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3. (10 pts) Suppose the stock S pays dividend at time to with to E (0, T). Let CA and PA be the prices of American call and put options, each with the same exercise price X and exercise time T. Use No-arbitrage arguments to prove that: S(0) - der to - X, CA PA where we assume the continuous interest rate is the constant r

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