Question: Using the Put Call Parity, show the equation for a SHORT STOCK. For the Black Scholes Option Pricing Model, list three important assumptions and then

  1. Using the Put Call Parity, show the equation for a SHORT STOCK.

  1. For the Black Scholes Option Pricing Model, list three important assumptions and then explain the real world deficiencies.

  1. Explain if and how the Binomial Option Pricing Model can be applied to valuing a call option in a corporate bond, known as a callable bond.

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