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10.2 Let S=$100,K=$95,r=8%,T=0.5, and =0. Let u=1.3,d=0.8, and n=1 a. Verify that the price of a European call is $16.196. b. Suppose you observe a

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10.2 Let S=$100,K=$95,r=8%,T=0.5, and =0. Let u=1.3,d=0.8, and n=1 a. Verify that the price of a European call is $16.196. b. Suppose you observe a call price of $17. What is the arbitrage? c. Suppose you observe a call price of $15.50. What is the arbitrage? 10.2 Let S=$100,K=$95,r=8%,T=0.5, and =0. Let u=1.3,d=0.8, and n=1 a. Verify that the price of a European call is $16.196. b. Suppose you observe a call price of $17. What is the arbitrage? c. Suppose you observe a call price of $15.50. What is the arbitrage

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