Suppose that you observe the following:

The price of a call option on the Euro () is 0.055 $/. The price of a put option on the is 0.045 $/. Both options have 92 days left to expiration and a strike price of 0.85 $/. The current spot rate is

0.89 $/. The $-risk free rate is 3.5% and the -risk free rate is 3.75%.

1. Is there an arbitrage opportunity? Why?
2. Calculate the arbitrage profits and show the arbitrage transactions and corresponding cash flows at t=0 (now) and at t=T=92 days later.