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16. In each of the following questions, you are asked to compare two options with...

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Accounting

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16. In each of the following questions, you are asked to compare two options with parameters as given. The risk-free interest rate for all cases should be assumed to be 6%. Assume the stocks on which these options are written pay no dividends. Put 0.5 0.5 50 50 0.20 0.25 Price of Option 10 10 Which put option is written on the stock with the lower price? 3. Not enough information Put Price of Option 0.5 0.5 50 50 0.2 0.2 10 12 Which put option must be written on the stock with the lower price? 3. Not enough information Call Price of Option 0.20 0.20 50 12 50 Which call option must have the lower time to expiration? 3. Not enough information

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