(c) A stock with spot price S is expected to pay a dividend of Dint years European call and put options on the stock with exercise price X and maturity T>tare trading at prices c and p, respectively. The continuously compounded risk-free rate is i Show that the following put-call parity relationship holds: c+ Xe=rT + Dert p+S (6 marks) ii. The stock price is $4. A 6-month at-the-money European put on the stock trades at $0.50. The corresponding call trades at $0.30. The continuously compounded risk-free rate is 10%. Do these prices imply the existence of an arbitrage opportunity? Explain