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A. Suppose that the stock price is $31, the exercise price is $30, the risk-free interest rate is 10% per annum, the price of a

A. Suppose that the stock price is $31, the exercise price is $30, the risk-free interest rate is 10% per annum, the price of a three-month European call option is $3, and the price of a three-month put option is $2.25. Both put and call have same strike price and time to maturity. Is there an arbitrage opportunity?

B. Suppose that the stock price is $31, the exercise price is $30, the risk-free interest rate is 10% per annum, the price of a three-month European call option is $3, and the price of a three-month put option is $1. Both put and call have same strike price and time to maturity. Is there an arbitrage opportunity?

Could you please provide and explaination and formulas involved? thank you

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