Business, 22.04.2020 02:06 09daishagreen

Consider European-style put options on a bond. The options expire in 60 days. The bond is currently at $1.05 per $1 par and makes no cash payments during the life of the option. The risk-free rate is 5%. Assume that the contract is on $1 face value bonds. Calculate the lower boundary of the put, if the strike price of the put is $0.95.

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Consider European-style put options on a bond. The options expire in 60 days. The bond is currently...

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