Business
Business, 18.03.2021 01:40, BeautyxQueen

Suppose that the current price of an asset is $31. The asset is expected to pay a dividend of $3 in one month. The asset also has an upfront carrying cost associated to it of $1. The risk-free rate is 5%. The price of a 3-month European call on this asset with strike $30 is $4. The price of a 3-month European put with strike $30 is $3.25. Construct a risk-free profit involving one call and one put.

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Suppose that the current price of an asset is $31. The asset is expected to pay a dividend of $3 in...

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