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Hi, I need help explaining question 2 ONLY, thank you! The one-year European call on SysCom with a strike price of $110 trades for $15.
Hi, I need help explaining question 2 ONLY, thank you!
The one-year European call on SysCom with a strike price of $110 trades for $15. Also, the one-year European put with a strike price of $110 is worth $5. Find the one-year interest rate. A one-year binary cash-or-nothing call option with strike at $120 pays $1 at expiration if the stock price of SysCom is above $120 one year later On the other hand, a one-year binary cash-or-nothing put option with strike at $120 pays $1 at expiration if the stock price is below $120 one year later. Suppose we know that the price of this binary call option is $0.51. What is the price of the binary put-optionStep by Step Solution
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