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The fictional currency cubit has a negative interest rate and as a result a cubit - denominated risk - free unit discount bond maturing in

The fictional currency cubit has a negative interest rate and as a result a cubit-denominated risk-free unit discount bond maturing in one year is worth 2 cubits today. On the other hand, the one-year risk-free interest rate on a dollar is zero. The current spot price of one cubit is $100. There is no forward (or futures) market in cubits, but you can trade one-year European calls and puts on cubits with$100 strike. If the put premium is $40, what is the call premium? How would you create an arbitrage if you found the quoted call premium is $10 higher than your theoretical answer? Create a arbitrage table with trade,time zero and time T. Buy the call or sell the call etc.

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