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a) Write down the payoff of a put option with a strike of K. What is the payoff for a portfolio consisting of a long
a) Write down the payoff of a put option with a strike of K. What is the payoff for a portfolio consisting of a long call and a short put both struck at K? Can you construct an arbitrage from this portfolio? b) Tesla shares are trading at $1,000 and the one year forward is trading at $1,100. Economists predict a 20% growth in revenues. Where will Tesla be trading in one year's time? a
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