Show formulas in excel A European call option and put option on a stock both have a strike price of $20 and an expiration date in three months. Both sell for $3. The risk-free interest rate is 10% per annum, the current stock price is $19, and a $1 dividend is expected in one month. What is the arbitrage opportunity open to a trader?
This information is summarized in the table below.
	Price of European call option			$3.00
	Price of European put option			$3.00
	Strike price of both options			$20.00
	Time to expiration (months)			3
	Risk-free interest rate			10%
	Current stock price			$19.00
	Expected dividend			$1.00
	Time until dividend received (months)			1
What is the present value of the expected dividend?
What is the value of the Left-Hand Side (LHS) of the put-call parity equation above?
What is the value of the Right-Hand Side (RHS) of the put-call parity equation above?
Which side of the put-call parity equation is overvalued (and should therefore be "sold")?