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A share of LFK currently trades at $124.9. A call of on LFK stock with exercise price 117 and time to expiration of 1.6 years
A share of LFK currently trades at $124.9. A call of on LFK stock with exercise price 117 and time to expiration of 1.6 years costs $12.6, and a corresponding put option with the same exercise price and time to expiration costs $12.1. The annualized interest rate is 0.01. Assume that LFK does not pay dividends. Calculate the possible arbitrage profit. Use regular discounting, 1/(1+r)t, round to the nearest cent and don't forget to include the $ sign with your answer.
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