Chapter+25+-additional+parts+to+Question+4

Chapter+25+-additional+parts+to+Question+4 - 4 d If the...

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Chapter 25 ADDITION TO QUESTION 4 (pg 787) 4 c) If the call option on the market sells for $0.50 less than calculated in part (b), what arbitrage transactions would you make to create arbitrage profits? Assume you can borrow or lend at the same rate of T-bills.
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Unformatted text preview: 4 d) If the call option on the market sells for $0.50 higher than calculated in part (b), what arbitrage transactions would you make to create arbitrage profits? Assume you can borrow or lend at the same rate of T-bills....
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