Suppose a share of stock is trading at 30 , a put with a strike of 28

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Suppose a share of stock is trading at 30 , a put with a strike of 28 is trading at 1 and a call with strike 29 at 8 . The maturity of both options is 1 period. The risk free rate is $20 \%$. Is there an arbitrage opportunity (free lunch)?

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Lectures On Corporate Finance

ISBN: 9789812568991

2nd Edition

Authors: Peter L Bossaerts, Bernt Arne Odegaard

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Question Posted: May 21, 2024 03:03 AM

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Suppose a share of stock is trading at 30 , a put with a strike of 28

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Lectures On Corporate Finance

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