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The price of a European put option with a strike price of $120 and a maturity of nine months is $7. The underlying stock price
The price of a European put option with a strike price of $120 and a maturity of nine months is $7. The underlying stock price is currently traded at $112, and a dividend of $1.2 is expected in three months and in six months. The term structure of interest rates is flat at 8%. If the price of a European call option with the same strike as the above put option, is $8, are there any arbitrage opportunities?
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