If an Option Portfolio Generates a Zero Cash Flow at Expiration

question 24

True/False

If an option portfolio generates a zero cash flow at expiration and a positive cash flow today, an arbitrage opportunity is available.

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Definitions:

In-

A prefix used to indicate negation or absence.

Retro-

A prefix meaning "backwards" or "behind," used in various contexts including medical terminology to denote location or time.

Backward

Denotes a movement or action directed towards the rear or in reverse.

Ante-

A prefix meaning before or preceding in time or order.