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9. There is a 1-month European put option on a non-dividend-paying stock with a strike price of $50. The current stock price is $47 and
9. There is a 1-month European put option on a non-dividend-paying stock with a strike price of $50. The current stock price is $47 and the risk-free interest rate is 6% per annum. a) What is the lower bound for the price of the put option? b) Is there any arbitrage opportunity if the price of the put option is $2.50? If so, describe how an arbitrageur would trade
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