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The following prices are given for American call options on a stock whose current price is $100. a) Show how you can make arbitrage profits
The following prices are given for American call options on a stock whose current price is $100.
a) Show how you can make arbitrage profits with an appropriate explanation.
Strike Price | Expiration Month | |
March | June | |
105 | 10 | 8 |
b) Show how you can make arbitrage profits with an appropriate explanation.
Strike Price | Expiration Month | |
March | ||
105 | 10 | |
110 | 12 |
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