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1) Upper Bound: European Put Arbitrage Suppose that: T $17.00 1.00 $18.00 10.0% K r Show that there is an arbitrage opportunity. Show how you

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1) Upper Bound: European Put Arbitrage Suppose that: T $17.00 1.00 $18.00 10.0% K r Show that there is an arbitrage opportunity. Show how you would exploit the arbitrage opportunity. What is your minimum gain? Hint: Sell the put (it's worth too much) and invest proceeds. Then find the maximum possible cash outflow due to the short put position at maturity

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