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* * * ( MUST ANSWER IN EXCEL w / Functions ) * * * A European call with X = 8 0 and the

***(MUST ANSWER IN EXCEL w/ Functions)***
A European call with X=80 and the time to expiration (T) of 1 year currently sells for $10(C0). The underlying stock price, S0, is $85. The risk-free interest rate is 5%. You are considering purchasing a European put option with the same exercise price and expiration date.
3) The European put option price(P0) is currently $0.50. Does it violate Fact 3(Put-Call Parity)? If so,
provide your arbitrage strategy.
4) What is your todays profit (cash flow)?
5) What is your profit (cash flow) on the expiration date if ST=70? Describe your actions to have each cash flow for your profit on the expiration date.
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