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Use the table for the question(s)below.
-Suppose that security C had a risk premium of 30%,describe what arbitrage opportunity exists and how you would exploit it.
In The Money
A term used in options trading to describe a situation where an option has intrinsic value, indicating a favorable position.
Employee Stock Option (ESO)
A benefit given to employees which grants them the right to purchase shares of the company at a specified price after a certain period.
Call Options
Financial contracts giving the option buyer the right, but not the obligation, to buy a stock, bond, commodity, or other assets at a specified price within a specific time period.
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