Question: Q5. Let S = $100, K = $95, r = 8% (continuously compounded), = 30%, T = 1 year, and n = 3. Assuming that

Q5. Let S = $100, K = $95, r = 8% (continuously compounded), = 30%, T = 1 year, and n = 3.

Assuming that the stock pays a continuous dividend of 8% per year (continuously compounded), calculate the prices of European puts and calls.

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