A stock is selling for $18.50. The strike price on a call, maturing in 6 months, is $20. The possible stock prices at the end
A stock is selling for $18.50. The strike price on a call, maturing in 6 months, is $20. The possible stock prices at the end of 6 months are $22.50 and $15.00. Interest rates are 6.0%. How much money would you borrow to create an arbitrage on a call trading for $2.00?
a) $2.54
b) $4.85
c) $.6.60
d) $.8.85
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Authors: Stephen L. Nesbitt
2nd Edition
1119944392, 978-1119944393
