Consider a put contract on a T-bond with an exercise price of 101 12/32. The contract represents

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Consider a put contract on a T-bond with an exercise price of 101 12/32. The contract represents $100,000 of bond principal and has a premium of $750. The actual T-bond price is currently 100 1/32. How can you arbitrage this situation?

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Financial Markets And Institutions

ISBN: 978-0132136839

7th Edition

Authors: Frederic S. Mishkin, Stanley G. Eakins

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Question Posted: Nov 12, 2012 01:16 AM

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Consider a put contract on a T-bond with an exercise price of 101 12/32. The contract represents

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a Purchase the actual Tbond for 10003125 b Purcha...View the full answer

Financial Markets And Institutions

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