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Q10 You are given the following information regarding a stock: The current price of the stock is 100 The stock does not pay dividends In

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Q10 You are given the following information regarding a stock: The current price of the stock is 100 The stock does not pay dividends In one year, the stock price will either increase to 130 or decrease to Y The continuously compounded risk-free interest rate is 6% The current price of a one-year European put option with strike price K=100 on the stock is 10.19 Calculate the current price of a one-year European call option on the stock with a strike price of 1.4Y Q10 You are given the following information regarding a stock: The current price of the stock is 100 The stock does not pay dividends In one year, the stock price will either increase to 130 or decrease to Y The continuously compounded risk-free interest rate is 6% The current price of a one-year European put option with strike price K=100 on the stock is 10.19 Calculate the current price of a one-year European call option on the stock with a strike price of 1.4Y

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