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Question
Rankin Corp. common stock is priced at $74.20 per share. The company just paid its $1.10 quarterly dividend. Interest rates are 6.0%. A $70.00 strike European call, maturing in 6 months, sells for $6.50. How much arbitrage profit/loss is made by shorting the European call, which is priced at $2.50?A) $0.12 loss
B) $0.12 gain
C) $0.36 loss
D) $0.36 gain
Answer
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Related questions
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