Question: PLEASE USE EXCEL TO ANSWER THE QUESTIONS 100. 10. ABC stock is currently at 100. In the next period, the price will either increase by

PLEASE USE EXCEL TO ANSWER THE QUESTIONS

100. 10. ABC stock is currently at 100. In the next period, the price will either increase by 5% decrease by 5%. The risk-free rate of return per period is 3%. Consider a put options ABC stock with strike K (a) Set up a replicating portfolio to value the put. (b) Suppose the put is trading for $2. Explain how you would exploit the resulting arbitrage opportunity. in nadal with the narameters LOS

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