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Determine the price of the synthetic stock

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Reference no: EM131041807

Given that exercise price is $75, call option premium is $3.5, put option premium is $ 1, both options have a time to maturity of 32 days, and the risk free rate is 5o/o p.a., please show how you could create a "synthetic stock" that could serve as the underlying asset of the two European options. Determine the price of the synthetic stock.

Reference no: EM131041807

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