3. Suppose that the price of a stock today is at $25. For a strike price of K = $24 a 3-month European call option on that stock is quoted with a price of $2, and a 3-month European put option on the same stock is quoted at $1.5 Assume that the risk-free rate is 10% per annum. (a) Does the put-call parity hold? (b) Is their an arbitrage opportunity? If yes, explain how the arbitrage strategy would look like. Comment: As usual, assume that you are able to (i) trade (i.e., buy and sell) both options at their quoted prices, (ii) short sell the stock, and (iii) that you can invest money at the risk-free rate. 3. Suppose that the price of a stock today is at $25. For a strike price of K = $24 a 3-month European call option on that stock is quoted with a price of $2, and a 3-month European put option on the same stock is quoted at $1.5 Assume that the risk-free rate is 10% per annum. (a) Does the put-call parity hold? (b) Is their an arbitrage opportunity? If yes, explain how the arbitrage strategy would look like. Comment: As usual, assume that you are able to (i) trade (i.e., buy and sell) both options at their quoted prices, (ii) short sell the stock, and (iii) that you can invest money at the risk-free rate