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European call and put options on the same stock with the same exercise prices of...

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Accounting

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European call and put options on the same stock with the same exercise prices of $45 will expire in 115 days. The underlying stock is currently priced at $48 and makes no cash payments during the life of these options. The risk-free rate is 4.5% per annum with continuous compounding. The put is currently selling for $3.75. According to the put call parity, the price of the call option is closest to: Select one: O a $8.31 Ob $7.38 O c. $6.10 Od $7.31 The hedge ratio of a put option is -0.44. If the price of the underlying stock decreases from $42 to $33, the price of the put option will O a decrease by approximately 0.44 O b. increase by approximately 0.44 O c. decrease by approximately 3.96 Od increase by approximately 3.96

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