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A stock is currently trading at a price of 22. You observe the following prices for European call options on the stock (the strikes are

A stock is currently trading at a price of 22. You observe the following prices for European call options on the stock (the strikes are in parentheses): C(20) = 3.25, C(22) = 1.95, and C(24) = 0.40. You can conclude from this that (a) The 20-strike call is overvalued. (b) The 24-strike call is undervalued. (c) The prices of the calls are inconsistent with no-arbitrage. (d) The stock is mispriced.

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