You are working on the options trading desk of FINM Investment Bank. Three-month European call and puts
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Question:
You are working on the options trading desk of FINM Investment Bank. Three-month European call and puts on stock BUSN with strike $60 are selling for $5 and $3, respectively. BUSN is currently trading at $60 and does not pay dividends. The interest rate is 3% p.a.c.c.
Are you able to make an immediate and riskless profit without any out-of-pocket expenses? If so, show all steps and calculations for the entire duration of your strategy.
Related Book For
Principles of Auditing and Other Assurance Services
ISBN: 978-0078025617
19th edition
Authors: Ray Whittington, Kurt Pany
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