Question: For all problems on this exam, assume an eective monthly interest rate of 1% unless otherwise indicated in the problem. 2. (Ford, continued) The current

For all problems on this exam, assume an eective monthly interest rate of 1% unless otherwise indicated in the problem.

2. (Ford, continued) The current price of Ford Motors stock (ticker symbol F) is $12.46. The price of a call with strike K = 12 and expiry time T = 1.5 months is $0.81. Find the price of a put with strike K = 12 and expiry time T = 1.5 months assuming:

(a) the stock pays no dividends.

(b) the company initiates a dividend of $0.05 per share payable 1 month from today.

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