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Suppose that P is the price of a European put option to sell a security whose prsesnt price is S. Let K be the strike
Suppose that P is the price of a European put option to sell a security whose prsesnt price is S. Let K be the strike price of the option. Show that if then there is a buying and/or selling strategy that yields risk-less profit at expiration (i.e srbitrage is present). You may assume the interestr ate is r=0 so that the present value calculations are unnecessary.
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