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Business, 13.04.2021 01:30 dragongacha777

A stock has been trading in a narrow range around $50 per share for months, and you believe it is going to stay in that range for the next 3 months. The price of a 3-month put option with a strike price of $50 is $4. The risk-free (annually compounded) interest rate is 10% per year. a) What must be the arbitrage-free price of a 3-month at-the-money call option on the stock with a strike price of $50

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