8.7. Suppose you observe a European call option on a stock that is priced at less than...

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8.7. Suppose you observe a European call option on a stock that is priced at less than the value of S0  PV(K)  PV(div). What type of transaction should you execute to achieve arbitrage? (Be specific with respect to amounts and avoid using puts in this arbitrage.)

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Financial Markets And Corporate Strategy

ISBN: 9780071157612

2nd Edition

Authors: Mark Grinblatt, Sheridan Titman

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