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A put and a call on the same stock have a strike price of $140 and expire in 15 months. The stock costs $120 and

A put and a call on the same stock have a strike price of $140 and expire in 15 months. The stock costs $120 and pays no dividends. The call costs $20 and put costs $30 and the 12-month (annual effective) risk-free rate is 3%. To take advantage of this situation you buy or sell 1 call, buy/sell 1 put, buy/sell 1 stock, and invest or borrow cash. (You have to decide which securities you buy and which you sell). What is your arbitrage profit today?

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