Question
Suppose the current stock price is $110. The premium of a call option for this stock with an exercise price of $105 with 1
Suppose the current stock price is $110. The premium of a call option for this stock with an exercise price of $105 with 1 year to expiration is $17, while the premium for a put option for this stock with he same expiration and exercise price as the call option is $5. The risk-free rate is 5% per year. How can you exploit an arbitrage condition with the provided information?
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
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