When you looked at the newspaper quotes for options on ABC stock, you saw that a February
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When you looked at the newspaper quotes for options on ABC stock, you saw that a February call option with X = 37.5 is priced at 6.375, whereas the April call option with the same exercise price is priced at 6. Can you devise an arbitrage out of these prices? Do you have an explanation for the newspaper quotes?
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No you cannot devise an arbitrage out of these prices The newspaper quotes are likely du...View the full answer
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