European puts in Black-Scholes model. Use put-call parity of Example 10.10 to answer the following questions...

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European puts in Black-Scholes model. Use put-call parity of Example 10.10 to answer the following questions in the Black-Scholes model: (a) Prove that a European put (P, t ≤ T) with strike price K has the price P₁ = −S₁N(-d+) + Ke-r(T-¹)N(-d_), where d are evaluated at x = St. European puts in Black-Scholes model. Use put-call parity of Example 10.10 to answer the following questions in the Black-Scholes model: (a) Prove that a European put (P, t ≤ T) with strike price K has the price P₁ = −S₁N(-d+) + Ke-r(T-¹)N(-d_), where d are evaluated at x = St.

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Using the putcall parity formula we can show that the price of a European put option P with a strike ... View the full answer