put-call parity theorem
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2. Using the put-call parity theorem, determine the value of a T period put of the stock described in problem 1 with an exercise price of $110.
I ONLY NEED PROBLEM 2 TO BE SOLVED.
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The put-call parity theorem is utilized.
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1. You observe that a stock is currently selling for $100. Somehow you know that the two possible values for the stock at time T are $80 and $130. You also observe that (1+r)T = 1.1. You don't know the probabilities of the two states of the world occurring. ...
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