Which One of the Following Represents an Arbitrage Opportunity

question 89

Multiple Choice

Which one of the following represents an arbitrage opportunity?

• A)stock price of $18 and strike price of $20
• B)call price of $.40 and put price of $.40
• C)PCP-implied put price of $.30 and call price of $.28
• D)PCP-implied put price of $.30 and put market price of $.31
• E)PCP-implied call price of $.20 and a put market price of $.22

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Definitions:

Rapid Cycling

In the context of bipolar disorder, it refers to having four or more mood episode changes from mania, hypomania, to depression within a twelve-month period.

Major Depression

A mental disorder characterized by persistent sadness, lack of interest in activities, and other symptoms that impair daily functioning.

Cognitive Distortion

Irrational, faulty thinking patterns that contribute to emotional distress and mental health disorders.

Dichotomy

A division or contrast between two things that are presented as entirely different or opposite.