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A four-month European put option on a dividend-paying stock is currently selling for $3. The stock...

A four-month European put option on a dividend-paying stock is currently selling for $3. The stock price is $41, the strike price is $45, and a dividend of $0.80 is expected in two month. The risk-free interest rate is 8% per annum for all maturities. What opportunities are there for an arbitrageur? Show the cash flow table.

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jeff jeffy answered 1 year ago
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