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3.The price of a stock, which pays no dividends, is $50 and the strike price of a one-year European call option on the stock is

3.The price of a stock, which pays no dividends, is $50 and the strike price of a one-year European call option on the stock is $45. The call option premium is $5. The risk-free rate is 4% (continuously compounded). Is there an arbitrage opportunity? If yes, please describe your strategy, your cash flow, and your profit in one year. If no, please explain.

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