Consider two European call options with two different strike prices denoted by: K1 < K2. Both calls are on the same non dividend paying stock and for the same expiration date, T. Prove: At any time t, (t < T), the premiums on these calls satisfy the following inequality: c(K1) – c(K2) ? (K2 – K1)e–r(T – t)

Given that the annual risk-free rate is r = 4.52% and that the JUL time to expiration is 144 days, check numerically whether the result holds for the K1 = 30 and K2 = 35 JUL calls.

If the result does not hold, open a strategy that will create an arbitrage profit and, using a table of cash flows and P/L at JUL expiration, calculate the arbitrage profit per share.

A) plot the m1 and m2 money stock in the us from 1990-2015. (hint: you may use the data tools provided by fred.) (b) plot the nominal interest rate from 1960 to 2014. (hint: you can either use the daily interest rates for selected u. s. treasury, private money market and capital market instruments from or the effective federal funds rate fromfred.) (c) the consumer price index (cpi) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. intuitively, the cpi represents the cost of living or the average price level. plot the cpi from 1960 to 2013.(d) the inflation rate is the yearly percentage change in the average price level. in practice, we usually use the percentage change in the cpi to compute the inflation rate. plot the inflation rate from 1960 to 2013.(e) explain the difference between the ex-ante and ex-post real interest rate. use the fisher equation to compute the ex-post real interest rate. plot the nominal interest rate and the ex-post real interest rate from 1960 to 2013 in the same graph.