A stock currently trades at $110.June call options on the stock with a strike price of $105 are priced at $4.Calculate the arbitrage profit that you can earn.
A) $0
B) $1
C) $5
D) $4
E) None of the above

Name: A stock currently trades at $110.June call options on the stock with a strike price of $105 are priced at $4.Calculate the arbitrage profit that you can earn. A) $0 B) $1 C) $5 D) $4 E) None of the above
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Question

Quizplus · Accepted Answer

Arbitrage profit = 110 - 105 - 4 = $1

A Stock Currently Trades at $110