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Q3.2 Suppose that the 5 Marks - Stock price of a stock is 100 - Strike price of options is 100 - Risk-free interest rate

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Q3.2 Suppose that the 5 Marks - Stock price of a stock is 100 - Strike price of options is 100 - Risk-free interest rate is 3% per annum - Price of a 6-month European call option is 15 - Price of a 6-month European put option is 10 Does an arbitrage opportunity exist? If yes, tell us what all trades you will execute to earn risk-free profit. Suppose the closing price of the stock is 2 on the option's expiration day

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