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Describe the principle used to calculate the put price

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a) Luther industries is currently trading for $26.5 per share. The stock pays no dividends. A one year European call option on Luther with a strike price of $29.5 is currently trading for $4.5. The risk-free interest rate is 3.5% per year. Calculate the price of a one-year European put option on Luther with a strike price of $29.5.

b) Describe the principle used to calculate the put price in a).

Reference no: EM132481509

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