Suppose you pay 5 to buy a European (K = 100, t = 1/2) put option on
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Suppose you pay 5 to buy a European (K = 100, t = 1/2) put option on a given security. Assuming a nominal annual interest rate of 6 percent, compounded monthly, find the present value of your return from this investment if
(a) S(1/2) = 102
(b) S(1/2) = 98
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