The price of a three-month at-the-money call option on a stock at a price of $80 is
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The price of a three-month at-the-money call option on a stock at a price of $80 is currently $5. What is the maximum possible continuously compounded interest rate in the market for three-month maturity that is consistent with the absence of arbitrage?
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We may use the noarbitrage condition fo...View the full answer
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