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7. A European call option and put option on the stock both have a strike price of $20 and an expiration date in three months.
7. A European call option and put option on the stock both have a strike price of $20 and an expiration date in three months. Both sell for $3.00. The risk-free interest rate is 10% per annum, the current stock price is $19, and a $1.00 dividend is expected in one month. What arbitrage
profit is available?
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