question archive •stock price =$75 •T=0
•stock price =$75 •T=0
Subject:FinancePrice: Bought3
•stock price =$75
•T=0.25 (3 months)
•Call x=$75 =$4.50
•Put x=$75 =$3.80
•PV of bond (Rf=5% Fv=$75 T=.25) =$74.09
-Exploit the arbitrage opportunity and show the appropriate arbitrage strategy.
