Question: Exercise 3: Arbitrage opportunities Suppose that = 5 SO = 30 T = 0.5 r = 12% K = 25 D = 0 What are

Exercise 3: Arbitrage opportunities Suppose that = 5 SO = 30

Exercise 3: Arbitrage opportunities Suppose that = 5 SO = 30 T = 0.5 r = 12% K = 25 D = 0 What are the arbitrage possibilities when p = 2.5 ? p = 1.75 ? = Exercise 3: Arbitrage opportunities Suppose that = 5 SO = 30 T = 0.5 r = 12% K = 25 D = 0 What are the arbitrage possibilities when p = 2.5 ? p = 1.75 ? =

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