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A call and a put are both available at a strike price of 50 with the terminal period in 9 months. The risk-free rate available
A call and a put are both available at a strike price of 50 with the terminal period in 9 months. The risk-free rate available for borrowing or lending is 10%. The call is currently trading at $5 while the put is trading at $10.
Show that the above violates put-call parity.
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