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The price of a non-dividend-paying stock is $100 and the continuously compounded risk-free rate is 5%. A 1-year European call option with a strike price

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The price of a non-dividend-paying stock is $100 and the continuously compounded risk-free rate is 5%. A 1-year European call option with a strike price of $100 x 20.05x1 = $105.127 has a premium of $11.924. A 1 year European call option with a strike price of $100 x 20.05x1.5 = $107.788 has a premium of $11.50. Demonstrate an arbitrage

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