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The current price of a stock is $51. A dividend of $1 is expected in one year. A European call option on the stock with
The current price of a stock is $51. A dividend of $1 is expected in one year. A European call option on the stock with a strike price of $50 and a maturity of one year is worth $7. A European put option on the stock with a strike price of $50 and a maturity of one year is worth $6. Interest rates are zero. Which of the following is true? A. The call price is low relative to the put price B. The put price is low relative to the call price C. None of the above
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