Consider the upper-bound for the call option

Consider the upper-bound for the call option

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Reference no: EM131492573

Consider the upper-bound for the call option

C ≤ S.

Show that there is arbitrage if this bound is violated, i.e. consider that the price of the option is

C = S + A, A > 0

and show that there is arbitrage.

Reference no: EM131492573

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