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Business, 26.11.2019 16:31 ckfuentes6272

a 2-month european put option on a non-dividend paying stock is currently selling for $2. the stock price is $47, the strike price is $50, and the risk-free rate is 6% per year (with continuous compounding) for all maturities. does this create any arbitrage opportunity? why? design a strategy to take advantage of this opportunity and specify the profit you make.

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