Question: The following is the current market value of 4 investments & their cash flow. Determine the arbitrage opportunity and how much would you make on the arbitrage?
|
Investment
|
Current Price
|
Cash Flows
|
|
|
|
Year 1
|
Year 2
|
Year 3
|
|
A
|
$1883.24
|
2000
|
0
|
0
|
|
B
|
$ 881.66
|
0
|
1000
|
0
|
|
C
|
$1031.90
|
0
|
0
|
1250
|
|
D
|
$1401.30
|
400
|
200
|
1000
|