Question: Consider a one year option with exercise price $50 on a stock with annual standard deviation of 20 percent. The T-bill rate is 8 percent

Consider a one year option with exercise price $50 on a stock with annual standard deviation of 20 percent. The T-bill rate is 8 percent per year. If the current stock price is $45 per share, what are the fair price for a call and a put for this stock?

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