Question: 5. Prove the following condition using an arbitrage argument. In vour proof, show the initial positive cash flow when the condition is violated and prove

5. Prove the following condition using an arbitrage argument. In vour

proof, show the initial positive cash flow when the condition is violated

5. Prove the following condition using an arbitrage argument. In vour proof, show the initial positive cash flow when the condition is violated and prove that there are no liabilities at expiration. The condition is: (3900(1) (390(le <: pvle m. this means that the difference between a european call option with low strike price x1 and high x2 is less than present value of two prices>

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