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Suppose that the premiums of an American call and put are C = $8.0/share and P = $7.5/share. The current stock price is S =
Suppose that the premiums of an American call and put are C = $8.0/share and P = $7.5/share. The current stock price is S = 45.86 while the Strike for both options is $45.00/share. The stock does not pay dividends. 7.1 Show that there is arbitrage. 7.2 Indicate a strategy that based on the above will create an arbitrage profit
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