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Stock that doesn't pay a dividend is trading at $5. A riskless bond that will pay $100 after a year is trading at $94. A
Stock that doesn't pay a dividend is trading at $5. A riskless bond that will pay $100 after a year is trading at $94. A European call option on the stock with strike price of $60 and one year to maturity is trading at $6.1. Devise an arbitrage strategy and prove that it works in all scenarios.
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