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Binary call and put options give the following payoff at maturity T: If S(T) > E, the binary call pays a fixed amount L, otherwise
Binary call and put options give the following payoff at maturity T: If S(T) > E, the binary call pays a fixed amount L, otherwise nothing. If S(T) 2 E, the binary put pays nothing, otherwise a fixed amount L. Show using a no-arbitrage argument that binary options with the same T and same strike price E satisfy the following put-call parity relation: | C + P = Le-T
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