Question: Is there an arbitrage possibility given the following information? Given: strike price (K) = 30, stock price (S) = 31, interest rate (r) =10%, time
Is there an arbitrage possibility given the following information?
Given: strike price (K) = 30, stock price (S) = 31, interest rate (r) =10%, time length (T) = 0.25, dividend rate (D) = 0, European call price (c) = 3, European put price (p) = 2.25
Please go through step by step and explain the actions that should be taken to profit if an arbitrage opportunity is possible.
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