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Exercise 1.5. We consider a one period financial market with one financial asset S which is arbitrage free. Suppose that a put and a call

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Exercise 1.5. We consider a one period financial market with one financial asset S which is arbitrage free. Suppose that a put and a call on S1 with same strike K, that is C=(S1K)+andP=(KS1)+ are available on the market for fair prices (C) and (P). Show the put call parity (C)(P)=S0K/(1+r)

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