Homework answers / question archive / 3) Suppose call and put prices are given as follows: Strike 50 55 Call premium 9 10 Put Premium 7 6 What no-arbitrage property is violated? What spread do you need to construct to engage in arbitrage

3) Suppose call and put prices are given as follows: Strike 50 55 Call premium 9 10 Put Premium 7 6 What no-arbitrage property is violated? What spread do you need to construct to engage in arbitrage

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3) Suppose call and put prices are given as follows: Strike 50 55 Call premium 9 10 Put Premium 7 6 What no-arbitrage property is violated? What spread do you need to construct to engage in arbitrage. What is the magnitude of the arbitrage profits?