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Assume the price of a European put with maturity 3 months and strike price $40 is $2.75. If the underlying stock price is $38, the

Assume the price of a European put with maturity 3 months and strike price $40 is $2.75. If the underlying stock price is $38, the yearly risk-free rate is 10% and there are no dividends, then the equilibrium price of a European call with the same maturity and strike price is closest to (can be solved using put-call parity theory)

$2.50

$1.75

0

$3.75

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