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The following table shows the spot market prices of call and put options on a share at spot price S = 115.50. The expiry of
The following table shows the spot market prices of call and put options on a share at spot price S = 115.50. The expiry of the options is one month away and the risk-free interest rate is 4% per annum. As an arbitrageur, show your argument to get a risk-free profit. Table 1: Table of call and put option prices (in ) call price strike price put price 7.95 120 10.95 The following table shows the spot market prices of call and put options on a share at spot price S = 115.50. The expiry of the options is one month away and the risk-free interest rate is 4% per annum. As an arbitrageur, show your argument to get a risk-free profit. Table 1: Table of call and put option prices (in ) call price strike price put price 7.95 120 10.95
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