You have XYZ trading at $42. European 6-month 40 calls and puts are traded at: CallPut bid/ask5
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Question:
You have XYZ trading at $42. European 6-month 40 calls and puts are traded at:
CallPut
bid/ask5 / 5.52.75/ 3.25
Assuming the risk free rate is 0%, do you see any arbitrage opportunity? Justify your answer.
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1118845899
3rd edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
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