an option trader observed the following prices for options on A stock:

$4.15 for a call with an exercise price of $50

$4.50 for a put with an exercise price of $50

both options expire in exactly 6 months and the risk free rate is 6%.

contract multiplier = 100 for calls, puts and stocks

face value for treasury bills is $10,000

1. given the current market prices for the two options, calculate the no-arbitrage price of a share of A stock
2. if the actual market price of A stock is $50, demonstrate the arbitrage transaction you could create to take advantage of the discrepancy. Be specific as to the positions you would need to take in each security and the dollar amount of your profit.