What is the current price of a european put option

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(a) What is the current price of a European put Option on the stock where the option expires in one year and has an exercise or strike price of $50?

(b) What is the expected return to holding the stock for one year?

(c) What is the expected return to holding the option for one year? Is this different from the expected return to holding the stock? Why or why not? (Hint: you might want to review the "General Ideas in Asset Pricing" on pages 48 and 49 of the lecture notes: "Applications of Asset Pricing Models")

Reference no: EM133058349

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