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Fallstock Inc.'s stock price S is $45. European options on Fallstock have a strike price K = $50, a maturity T = 180 days, the

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Fallstock Inc.'s stock price S is $45. European options on Fallstock have a strike price K = $50, a maturity T = 180 days, the risk-free interest rate r = 5 percent per year, and the let the volatility o = 0.25 per year. The company is going to pay a dividend of 50 cents after 125 days. a. Compute the price of a call option using the Black-Scholes-Merton model. b. Compute the price of a put option

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