Suppose the desired put option were traded

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You would like to be holding a protective put position on the stock of XYZ Company to lock in a guaranteed minimum value of $100 at year-end. XYZ currently sells for $100. Over the next year, the stock price will either increase by 10% or decrease by 10%. The T-Bill rate is 5.0%. Unfortunately, no put options are traded on XYZ Co. Suppose the desired put option were traded. How much would it cost to purchase?

Reference no: EM131556636

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