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Create a synthetic call option

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Reference no: EM131105325

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.)

Reference no: EM131105325

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