What should the market price of the put option


The market price of a European call is $3.00 and its price given by Black-Scholes-Merton model with a volatility of 30% is $3.50. The price given by this Black-Scholes-Merton model for a European put option with the same strike price and time to maturity is $1.00. What should the market price of the put option be? Explain the reasons for your answer.

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Financial Management: What should the market price of the put option
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