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Utilize the Put/Call Parity principle to analyze the following situation and discuss whether there is a profitable strategy. If there is a profitable strategy, what
Utilize the Put/Call Parity principle to analyze the following situation and discuss whether there is a profitable strategy. If there is a profitable strategy, what is it? Explain your calculations.
Stock Price = $80
Call Price = $16, one year expiration
Put Price = $2, one year expiration
Strike Price = $70
Risk free rate =3%
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