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9. Joe is a trader that arbitrages mispricing of options. After returning to his desk after lunch he notices the following 1-year option data available:

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9. Joe is a trader that arbitrages mispricing of options. After returning to his desk after lunch he notices the following 1-year option data available: Call Strike Call Premium 90 10 95 4 Joe sees an arbitrage opportunity. Assume that you can only buy or sell a single unit of each option and that the continuously compounded risk free rate is 8%. Determine the minimum and maximum risk free economic profit Joe can make at time t = 1. a) Minimum = -1.00 Maximum = 5.00 c) Minimum = 1.00 Maximum = 6.00 e) Minimum = 1.50 Maximum = 6.50 b) Minimum = 0 Maximum = 6.00 d) Minimum = 1.50 Maximum = 6.00

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