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PROBLEM 3: How Equal-Maturity Option Prices Vary with Strike Suppose the current price of a stock XYZ is $40 and we are considering two 3-month

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PROBLEM 3: How Equal-Maturity Option Prices Vary with Strike Suppose the current price of a stock XYZ is $40 and we are considering two 3-month puts on XYZ, strikes K and K+1. Can you come up with an upper bound for the price difference of these two puts? PROBLEM 3: How Equal-Maturity Option Prices Vary with Strike Suppose the current price of a stock XYZ is $40 and we are considering two 3-month puts on XYZ, strikes K and K+1. Can you come up with an upper bound for the price difference of these two puts

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