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Suppose you observe a European call option that is priced at less than the value Max [ 0 , S 0 - X ( 1
Suppose you observe a European call option that is priced at less than the value Max [ 0 , S 0 - X ( 1 + r ) - T ] . What type of transaction should you execute to achieve the maximum benefit? Demonstrate that your strategy is correct by constructing a payoff table showing the outcomes of expiration
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