Question: Problem 3.2 (2 points) Let K > AK and c(t, T, K) be the price of a European call option with strike K and maturity

Problem 3.2 (2 points) Let K > AK and c(t, T,

Problem 3.2 (2 points) Let K > AK and c(t, T, K) be the price of a European call option with strike K and maturity T. Show that c(t, T, K AK) 2 x c(t, T, K) + c(t, T, K + AK) > 0. Problem 3.2 (2 points) Let K > AK and c(t, T, K) be the price of a European call option with strike K and maturity T. Show that c(t, T, K AK) 2 x c(t, T, K) + c(t, T, K + AK) > 0

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