Question
Suppose there is a European call option on stock A with strike price X=2.0, which you may exercise in two periods. Its current fair price
Suppose there is a European call option on stock A with strike price X=2.0, which you may exercise in two periods. Its current fair price is 0.2. The risk free interest rate is 0.05.The current price of stock A is 1. Calculate the arbitrage-free price of the European put option with the same strike price. (Round your answer to 2 decimal places)
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Price Theory and Applications
Authors: Steven Landsburg
9th edition
1285423526, 978-1285947877, 1285947878, 978-1285423524
