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    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.

    See attached file for full problem description.

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    https://brainmass.com/economics/the-global-economy/put-call-parity-theorem-130934

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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. ...

    Solution Summary

    The put-call parity theorem is utilized.

    $2.19