Suppose that the current stock price is 110 the exercise, Financial Management

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Suppose that the current stock price is 110 the exercise

1. Suppose that the current stock price is $110, the exercise price is $100, the risk free interest rate is 6%, and the quoted call price is $4 for a 6-month European call option. Does an arbitrage opportunity exist?

2. Explain why the market share of passive mutual funds that use algorithms to select assets for their portfolios is growing relative to actively managed funds that rely on professional asset managers to select assets.

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Financial Management: Suppose that the current stock price is 110 the exercise

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