Does an arbitrage opportunity exist

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Reference no: EM132063305

1. Suppose that the current stock price is $110, the exercise price is $100, the risk free interest rate is 6%, and the quoted call price is $4 for a 6-month European call option. Does an arbitrage opportunity exist?

2. Explain why the market share of passive mutual funds that use algorithms to select assets for their portfolios is growing relative to actively managed funds that rely on professional asset managers to select assets.

Reference no: EM132063305

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