Suppose that s0 a0 100 both s0 and a0 is 100 and at 120, Ask an Expert

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Suppose that S(0) =A(0) = 100 (Both S(0) and A(0) is 100) and A(T) =120. Suppose you can enter a forward contract to buy or sell the risky security at time T with F = 100. Describe an arbitrage opportunity and calculate the amount V(T) ( your investment's worth at time T.)

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Financial Management, Finance

Category:- Financial Management
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