(Answered) A stock sells for 60 and the risk free rate of interest is

Management Studies

A stock sells for $60 and the risk free rate of interest is 10%. The call and a put on this stock expire in one year in both options have an exercise price of $55. How would you trade to create a synthetic call option? If the output sells for $2, how much is the call option worth? (Assume annual compounding.)

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Business Management, Management Studies

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