Consider a put option on a stock that currently sells for 100, but may rise to 120

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Consider a put option on a stock that currently sells for £100, but may rise to £120 or fall to £80 after 1 year. The risk free rate of return is 10%, and the exercise price is £90.

What is the price of a call option on the same stock with the same exercise price and the same expiration date?

Explain the reasoning behind your calculations.

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Financial Markets and Institutions

ISBN: 978-1337099745

12th edition

Authors: Jeff Madura

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Posted Date: Mar 21, 2023 02:19 AM

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Consider a put option on a stock that currently sells for 100, but may rise to 120

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Financial Markets and Institutions

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