Question: Question 2 [ 1 0 points ] Assume, for a call option, S 0 = $ 2 0 , K = $ 1 6 ,

Question 2[10 points]
Assume, for a call option, S0= $20, K = $16, r =10% per annum, and T =1 year. This
call option is sold in the market at $2. Compute the profit of an arbitrageur when stock
price after 1 year is $12.

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