8. (Put-Call Parity) XYZ stock is trading at $40. The effective annual interest rate is 5%, so...
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8. (Put-Call Parity) XYZ stock is trading at $40. The effective annual interest rate is 5%, so that 100 dollars lent for 1 year will return 105 dollars. One year call premiums are 9, 4, and 2 for strike prices of 35, 40, and 45, respectively. Draw a profit graph (or make a table) for the following strategy: buy one 45 strike call, sell one 40 strike put.
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