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Consider American call and put options on a debenture bond. The options expire in 55 days. The bond is currently at $1.10 with $1 par

Consider American call and put options on a debenture bond. The options expire in 55

days. The bond is currently at $1.10 with $1 par value and makes deferred payments over

life of the option. The risk-free rate is 6.5 percent. Assume that the contract is at $1 face

value bonds. Calculate the lowest and highest possible prices for the calls and puts.

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