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Derivative securities, Other Engineering
Let C (K) denote a European vanilla Call option with strike price K. Assume that all options are identical except for strike price, and strike prices satisfy K1 < K2 < K3 and =K1 + K3.
What are the no-arbitrage lower bound, and the no-arbitrage upper bound, of the vertical spread C(K1)-C(K2)?
Posted Date: 5/2/2012 12:37:57 AM | Location : United States
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