Consider the European call option of a nondividend-paying stock. Suppose that (P_{t}=$ 20, K=$ 18, r=6 %)
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Consider the European call option of a nondividend-paying stock. Suppose that \(P_{t}=\$ 20, K=\$ 18, r=6 \%\) per annum, and \(T-t=0.5\) year. If the price of a European call option of the stock is \(\$ 2.10\), what opportunities are there for an arbitrageur?
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