What are the transactions to be done today

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Question - What is a lower bound for the price of a 2-month European put option on a non-dividend-paying stock when the stock price is $12, the strike price is $15, and the risk-free interest rate is 6% per annum? If we see the European put option is sold for $2.5, is there an arbitrage opportunity? What are the transactions to be done today? How much is the immediate profit? What are the possible transactions to be done at maturity?

Reference no: EM132964048

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