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A European call option and put option on a stock both have a strike price of $20 and an expiration date in three months. Both
A European call option and put option on a stock both have a strike price of $20 and an expiration date in three months. Both sell for $3. The risk-free interest rate is 10% per annum, the current stock price is $19, and no dividend is expected in three months. How can you make a risk free arbitrage in these markets?
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