In early April 2022, Cochlear is trading at $122.69. The $125 call option that expires in 315 days is trading at a premium of
In early April 2022, Cochlear is trading at $122.69. The $125 call option that expires in 315 days is trading at a premium of $13.91 and the put option of the same series is trading at $10.13. These prices seem odd to you and you suspect that an arbitrage opportunity exists. You note the continuously compounded risk free rate is 2.5618%. What trade do you place and what is your expected profit from this trade?
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Given 3 P t P s C kert Porfit M 12269 1013 315 days 3 K C 1013 12269 13...
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Authors: R. Glenn Hubbard, Anthony Patrick O'Brien
3rd Edition
134524063, 9780134524573, 978-0134524061
