(solution) please explain your choice in detail Which of the following

(solution) please explain your choice in detail Which of the following

please explain your choice in detail

Which of the following statements is true in a market in which no arbitrage opportunities are available?

1) A long forward for delivery in one year at $100 is worth more than a long call option struck at $100 that expires in one year

2) A short forward which makes delivery in one year at $100 is worth more than a long put option struck at $100 that expires in one year

3) A short forward which makes delivery in one year at $100 is worth more than a short call option struck at $100 that expires in one yea

4) A long forward for delivery in one year at $100 is worth more than a short put option struck at $100 that expires in one year