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Problem 3 You see the following data in the Wall Street Journal. Ignore transaction costs. Stock XYZ Strike Exp -Puts- Vol. Last (Premium) 30.42 35
Problem 3
You see the following data in the Wall Street Journal. Ignore transaction costs.
Stock XYZ Strike Exp -Puts-
Vol. Last (Premium)
30.42 35 Jan 10 4.00
XYZ will pay no dividends before the options expiration day. The option is American.
Show whether there is a profit opportunity from buying an option and exercising immediately.
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