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Prove the following for American option prices: S0 D K C P S0 KerT . (Hint: For the first inequality, consider (a) a portfolio consisting

Prove the following for American option prices: S0 D K C P S0 KerT . (Hint: For the first inequality, consider (a) a portfolio consisting of a European call plus an amount of cash equal to D + K, and (b) a portfolio consisting of an American put option plus one share.)

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