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Business, 27.02.2020 22:25 mmvill0809

Assume we buy a 10-year zero-coupon bond with face value $1000 for $794.53 and a 1000-strike 10-year call on an index S for $282.264 Assume S is currentlypriced at $990.

a. What is the implied continuous annual rater?
b. What is the price of a 10-year 1000-strike put on S?

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