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Financial Risk Manager Part 1

Financial Risk Manager Part 1

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A trader with expertise in derivatives is determining the upper limit of prices for various options on a particular stock. The current market price of the stock is USD 100.00, and the annual continuously compounded risk-free interest rate is 12%. Given this information, what are the maximum possible prices for the following 3-month options, all with a strike price of USD 90.00: European call option, American call option, European put option, and American put option?

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