QUESTION 1 "Assume zero rates and no dividends, the forward price is $100. How to make an arbitrage trade if the call (at K-80) is quoted at $101? the call at K-100 for and the forward at K-0 for (Please write "sell or "buy" for the first and third blanks and integers for the second and fourth blanks)"
QUESTION 1 "Assume zero rates and no dividends, the forward price is $100. How to make an arbitrage trade if the call (at K-80) is quoted at $101? the call at K-100 for and the forward at K-0 for (Please write "sell or "buy" for the first and third blanks and integers for the second and fourth blanks)"
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:QUESTION 1
"Assume zero rates and no dividends, the forward price is $100. How to make an arbitrage trade if the call (at
K=80) is quoted at $101?
the call at K-100 for
and
the forward at K-0 for
(Please write "sell or
"buy" for the first and third blanks and integers for the second and fourth blanks)"
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