Question
Consider two securities that pay risk-free cash flows over the next two years and that have the current market prices shown here: Suppose a security
Consider two securities that pay risk-free cash flows over the next two years and that have the current market prices shown here:
Suppose a security with cash flows of $ 100 in one year and $200 in two years is trading for a price of $260.
What arbitrage opportunity is available? (Select the best choice below.)
| Security | Price Today | Cash Flow in One Year | Cash Flow in Two Years |
| B1 | $188 | $200 | 0 |
| B2 | $170 | 0 | $200 |
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The Oxford Handbook Of IPOs
Authors: Douglas Cumming, Sofia Johan
1st Edition
0190614579, 978-0190614577
