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Popoint 4. (16 points) Prove the following relationships. (a) (4 points) In a security market with uncertainty, suppose the interest rate r is a scalar,
Popoint 4. (16 points) Prove the following relationships. (a) (4 points) In a security market with uncertainty, suppose the interest rate r is a scalar, and let c and p denote the prices of a European call and put, respectively, both having the same strike price K. Show that the put-call parity holds, K - C-p=So - 1+r
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