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Q25 A stock currently sells for $30 and will pay a $5-dividend every year from year 1 until year 2. A 3-year European call on
Q25 A stock currently sells for $30 and will pay a $5-dividend every year from year 1 until year 2. A 3-year European call on the stock has a strike price of $30, and the current price of the call is $21. The risk-free rate is 1% per annum. Is there an arbitrage? If so, present the arbitrage table listing actions and resulting cash flows.
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