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thanks! An investor is analyzing the costs of one-year European options for Stock A and Stock B at a particular strike price Stock A pays
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An investor is analyzing the costs of one-year European options for Stock A and Stock B at a particular strike price Stock A pays dividends at a continuous rate of 2% and has a one-year forward price of 208.12. A one-year call option on one share of Stock A with strike price K costs 25.50. An equivalent put option costs 10.50. Stock B is a nondividend-paying stock and has a current selling price of 196.00. A one-year call option on one share of Stock B with strike K costs 18.50. The continuously compounded risk-free interest rate is 6%. Calculate the cost of a one-year put option for a share of Stock B A 2.75 3.00 3.25 D3.50 E3.75Step by Step Solution
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