1-year options are written on a stock which pays dividends at a continuous rate of...
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1-year options are written on a stock which pays dividends at a continuous rate of 2%. You observe that a stock is priced at 75.58, a 72-strike call is priced at 11.86 and a 72-strike put is priced at 5.85. The continuously compounded interest rate is 5% per annum. What transactions (if any) will comprise a part of the arbitrage process?
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