Identify the appropriate arbitrage opportunity

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Reference no: EM131527970

Suppose the current stock price is $150, the exercise price is $170, the annually compounded rate is 9%, the stock pays a $4 dividend in the next instant and the quoted put price is $25 for a 1 - year option.

Q- Identify the appropriate arbitrage opportunity in thorough detail (Quantitative). In Addition, give a detailed explanation of conclusion (Qualitative). Show ALL work AND define variables.

Reference no: EM131527970

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