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Consider a stock that does not pay dividend. A one-year European put option with strike $60 is trading at $6 and a one-year European put

  1. Consider a stock that does not pay dividend. A one-year European put option with strike $60 is trading at $6 and a one-year European put option with strike $80 is trading at $25. The risk-free interest rate is 8% per annum with continuous compounding. Construct an arbitrage strategy.

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