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Question 4: (10 marks) Consider a forward contract, a call option and a put option on a stock with strike price K which all expire

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Question 4: (10 marks) Consider a forward contract, a call option and a put option on a stock with strike price K which all expire in time T from now. Let the current price of the stock be S. Let the interest rate be R and assume continuous compounding. a) Using a two-period model, show that: (5 marks) Price of forward contract =SeRTK

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