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Suppose that a American put option with a strike price of $97.5 and maturity of 7.0 months costs $12.3. The underlying stock price equals 85.

Suppose that a American put option with a strike price of $97.5 and maturity of 7.0 months costs $12.3. The underlying stock price equals 85. The continuously compounded risk-free rate is 6.5 percent per year. What is the potential arbitrage profit from buying a put option on one share of stock?

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