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What should be the price of the stock

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Problem - Suppose the price of a European put option on a stock without dividends is $74.20 (X=1000, 6 months to expiry). The annual risk-free interest rate is 4%, compounded semi-annually (2% every six months). What should be the price of the stock in 6 months so that being long in the put would produce the same (net) pro?t as being short in the put?

Reference no: EM132986316

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