Question
What are the upper and lower bounds for the price of a four-month call option on a nondividend-paying stock when the stock price is $32,
What are the upper and lower bounds for the price of a four-month call option on a nondividend-paying stock when the stock price is $32, the strike price is $28, and the risk-free interest rate is 10% per annum? What is the arbitrage opportunity if the price of the option is $3? What are the net profits?
Please show work not using excel
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International Financial Markets And The Firm
Authors: Piet Sercu, Raman Uppal
1st Edition
1861523548, 978-1861523549
