Problem

16. The six-month continuously compounded rate of interest is 4%. The six-month forward pr...

16. The six-month continuously compounded rate of interest is 4%. The six-month forward price of stock KLM is $58. The stock pays no dividends. You are given that the price of a put option P(K) is $3. What is the maximum possible strike price Kthat is consistent with the absence of arbitrage?

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Solutions For Problems in Chapter 9