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The price of XYZ stock, which pays no dividends, is $53.34and the strike price of a two year European put option is $59.82. The risk-free
The price of XYZ stock, which pays no dividends, is $53.34and the strike price of a two year European put option is $59.82. The risk-free rate is 3.42% (continuously compounded). Which of the following is a lower bound for the option such that there are arbitrage opportunities if the price is below the lower bound and no arbitrage opportunities if it is above the lower bound?
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