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If the value of a market put on a stock is lower than the value of a corresponding synthetic put, determine an arbitrage opportunity that
If the value of a market put on a stock is lower than the value of a corresponding synthetic put, determine an arbitrage opportunity that you could take to earn a risk-free profit.
Buy a market put, sell some stock, and borrow money
Buy a market put, buy some stock, and lend money
Buy a market put, buy some stock, and borrow money
Sell a market put, buy some stock, and lend money
Sell a market put, buy some stock, and borrow money
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