Solved: Determine the value of a put, Finance Basics

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Determine the value of a put

Given the following:

S=$68, C=$15, Rf =10%, X=$60, and time to maturity of call = 3 month.

Q1. What is the value of a put with the same characteristics as the call above?

Q2. Suppose that the put in part "1" is trading for $ 3.00: Indicate clearly the transactions you should undertake in order to create a risk-free arbitrage profit. What is the arbitrage profit? (Make sure to show the cash flows)

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Finance Basics: Determine the value of a put

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