You Are Given the Following Discount Factors: You

question 1

Essay

You are given the following discount factors: You are told that the price of a European Call option on a 2-year ?xed rate bond paying 5% semiannually, with T =2andK = 101 is 4.6155. While the price of a European Put option with the exact same speci?cation is: 3.0500. Are the securities adequately priced?

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