Define the put-call parity

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Question: The price of a share of ABC-Corp stock is currently S0 = $55. Assume that the yearly interest 2%, and that the stock's volatility is 0.4.

a. Determine the prices of European call and put options with a exercise price of $55, and expiration in three months.

b. Verify put-call parity.

Reference no: EM131477353

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