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A stock that does not pay dividend is trading at $40. A European call option with strike price of $30 and maturing in one year
A stock that does not pay dividend is trading at $40. A European call option with strike price of $30 and maturing in one year is trading at $6. An American call option with strike price of $30 and maturing in one year is trading at $16. You can borrow or lend money at any time at risk-free rate of 5% per annum with continuous compounding. Devise an arbitrage strategy
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