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There are two European put options on the same stock with strike price $10. One expires in 6 months and the other expires in 10
There are two European put options on the same stock with strike price $10. One expires in 6 months and the other expires in 10 months. The continuously compounded interest rate is 10% per annum. The stock price is 0 today and will be 0 for the next 10 months. Which of the following statements is correct? a. The first option is more expensive b. The second option is more expensive c. The two options have the same price d. None of above
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