Question
Assume p is the price of a European put option on a non-dividend-paying stock. K is the strike price, T is the maturity time, the
Assume p is the price of a European put option on a non-dividend-paying stock. K is the strike price, T is the maturity time, the risk-free rate is r. S0 is the stock price for today. Prove
pmax(S0 +KerT,0) (The interest rate is continuously compounded.)
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
12th Edition
978-0030243998, 30243998, 324422695, 978-0324422696
