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1. (10 pts.) Given the following variables: S = $50, E = $75, T = 1 year, r= 5 %, and P = $25; if

1. (10 pts.) Given the following variables: S = $50, E = $75, T = 1 year, r= 5 %, and P = $25; if the call option is selling for $10 (C = $10), what arbitrage opportunity exists? Outline the strategy and the profit to be realized

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