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Consider a security that pays its owner $6000 in one year, without any risk. Suppose...

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Finance

Consider a security that pays its owner $6000 in one year, without any risk. Suppose the risk-free interest rate is 8%. What is the no-arbitrage price of the security today? If the security is trading for $5500, what arbitrage opportunity is available?

Select one: A. No arbitrage price = 4750; No arbitrage opportunity B. No arbitrage price = 5556; Buy C. No arbitrage price = 5000; Short Sell D. No arbitrage price = 5556; Short Sell E. No arbitrage price = 5000; Buy

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