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You observed the market price of the option is trading at $6.82 per share of call option. Is there risk-free arbitrage opportunity if the stock is trading at $120 per share and you expected the stock can be either $150 or $100 per share in one year and the strike price is $140 (negative sign indicates write the call, and positive sign indicates long the call), and assuming risk-free rate is 10%,? If yes, what the present value of the arbitrage profit? What’s the present value of the profit per share?

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