cThe price of a European call that expires in six months and has a strike price of $30 is $2. The underlying stock price is $29, and a dividend of $0.50 is expected in two months and in five months. The term structure is flat, with all risk-free interest rates being 10% per year continuously compounded. What is the price of a European put option that expires in six months and has a strike price of $30?

d)Explain carefully the arbitrage opportunities in Problem c) if the European put price trades at $3.

Just answer question d.