(Ⓒ) Suppose that the • Stock price of a stock is $59. Risk - free interest rate is 10% per annum • Exercise price of above stock is $50. Price of a 3-month European call option is $3 • Price of a 3-month European put option is $2.25 An arbitrage opportunity exists? If yes, calculate arbitrage profit if closing price of underlying is $90 on the day of expiry of option.

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