Put option and call option, Finance Basics

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Put option and call option

Question: Stock in the Nantucket Corporation is currently selling for USD 25 each share. In one year, the price will be either USD 20 or USD 30. T-bills with one year to maturity are paying ten percent. Determine the value of following options? [Show all work to receive full credit.]

[A] A put option with a strike price of $26?

[B] A call option with a strike price of $26?

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Finance Basics: Put option and call option

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