A non dividend paying stock is trading at $45. What arbitrage opportunity is present if an American

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A non dividend paying stock is trading at $45. What arbitrage opportunity is present if an American call option on the stock with an exercise price of $42 is trading at $2?

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Options Futures And Other Derivatives

ISBN: 9781292212890

9th Global Edition

Authors: John Hull

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Posted Date: Apr 25, 2024 06:53 AM

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A non dividend paying stock is trading at $45. What arbitrage opportunity is present if an American

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Expert Answer:

Answer In this scenario there is an arbitrage opportunity because the call option is underpriced Heres why Stock price 45 Call option strike price exe... View the full answer

Options Futures And Other Derivatives

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