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Business, 08.04.2020 00:48 rcmhargoux2970

You would like to be holding a protective put position on the stock of XYZ Co. to lock in a guaranteed minimum value of $105 at year-end. XYZ currently sells for $105. Over the next year the stock price will increase by 8% or decrease by 8%. The T-bill rate is 5%. Unfortunately, no put options are traded on XYZ Co. a. Suppose the desired put option were traded. How much would it cost to purchase? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

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