If the Observed Put Option Premium Is Less Than What

question 60

Multiple Choice

If the observed put option premium is less than what is suggested by the put-call parity equation, astute arbitrageurs could make a profit by ____ the put option, ____ the call option, and ____ the underlying currency.

• A) selling; buying; buying
• B) buying; selling; buying
• C) selling; buying; selling
• D) buying; buying; buying

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