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Consider Two Six-Month American Puts at Strikes 90 and 100

Question 17

Multiple Choice

Consider two six-month American puts at strikes 90 and 100. The risk free rate is 2%. The difference between the two put prices at any time before maturity will always be


A) Less than $10.
B) Equal to $10.
C) Greater than $10.
D) One cannot be sure of which of the preceding three choices is valid and more information may be required.

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