If the one-year rate of interestFocus Dreams/tutorialoutletdotcom

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If the one-year rate of interestFocus
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If the one-year rate of interestFocus
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• If the one-year rate of interest is 10 p.a., is
  the call price free from arbitrage, assuming that
  the stock pays no dividends? What if the stock
  pays a dividend of 5 in one year
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• Question 1
• Assume Koco Ltd current stock price is 70. The
  American one-year call option on the stock is
  trading at 20 with strike price of 70. If the
  one-year rate of interest is 10 p.a.
  (continuously compounding), is the call price
  free from arbitrage, assuming that the stock pays
  no dividends? What if the stock pays a dividend
  of 5 in one year? 

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If the one-year rate of interestFocus
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