Question: Suppose call and put prices are given by What no-arbitrage property is violated? What spread positionwould you use to effect arbitrage? Demonstrate that the spread

Suppose call and put prices are given by

Suppose call and put prices are given byWhat no-arbitrage property

What no-arbitrage property is violated? What spread positionwould you use to effect arbitrage? Demonstrate that the spread position is an arbitrage.

Strike Call premium 9 10 Put premium 50 55 7 6

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