Problem

In January 2009, a one-year call on the stock of Amazon.com, with an exercise price of $45...

In January 2009, a one-year call on the stock of Amazon.com, with an exercise price of $45.00, sold for $19.55. The stock price was $55. The risk-free interest rate was 2.5%. How much would you be willing to pay for a put on Amazon stock with the same maturity and exercise price? Assume that the Amazon options are European options. (Note: Amazon does not pay a dividend.)

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Solutions For Problems in Chapter 20