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Stock X is currently selling at $50 and you believe, one year from now, the Stock X will sell for either $60 (up-state) or $30
Stock X is currently selling at $50 and you believe, one year from now, the Stock X will sell for either $60 (up-state) or $30 (down-state). The yield on a 1-year risk-free zero coupon bond is currently 4%. You have a European put option with a 1-year expiration date and an exercise price of $40. The call option price with the same exercise price with the same maturity date is $14.10.
What is the put option price?
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