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  3. put strike $3.50 call strike ...

Put Strike $3.50 Call Strike ...

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Verified Solution

Question

Finance

Put

Strike

$3.50

Call Strike

$3.50

Probability

Actual Price

0.1

$2.0

0.2

$3.0

0.4

$3.1

0.2

$4.9

0.1

$5.0

Put Value

Call Value

Fair Premiums

  1. Calculate the put and call option values and fair premium for an option.
  2. Explain why one of the option premiums is higher than the other.

Answer & Explanation Solved by verified expert
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