XYZ stock is currently trading at $50 per share. The action does not pay any dividend. A one-year European call option on XYZ stock with a price strike of $46 is currently trading at $7. The risk-free interest rate is 5 %. The European put option with a one-year expiry date on XYZ stock and at a price strike of $46, is trading at $1.

a) Is there an arbitrage opportunity?

b) If yes, determine how to exploit it?

c) What would be the net gain from this strategy?