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Business, 27.04.2021 15:00 Barret07

Suppose you observe European put and call prices on a stock with a current price of $56. Both options have a strike of $60 and 3 months to expiration. The call price is $1.95 and the put price is $5.60. The 3-month T-bill (value in three months $100) is valued at $99.50 today. Detect, construct, and describe an arbitrage portfolio.

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Suppose you observe European put and call prices on a stock with a current price of $56. Both option...
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