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An investor has just obtained the following quotes for a European call on non-dividend stocks with a strike price of $ 23 and a six-month
An investor has just obtained the following quotes for a European call on non-dividend stocks with a strike price of $ 23 and a six-month maturity. Stock price $ 30 Option Price $ 3 The one-year risk-free interest rate is 6% per annum compounded continuously. a.- Explain the arbitration opportunity b.- Explain the strategy and the results upon expiration of the option
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