Construct a trading strategy to take advantage

Reference no: EM133430251

Question: The current price of a share of United Airlines is $45 and the riskless rate of return is 8% per annum (continuous compounding). Consider a European put and a European call on a share of United Airlines sharing the common strike price of $48 and the common maturity of 6 months. The price of the put is $5.00 and the price of the call is $4.55. Are there any arbitrage opportunities? If so, construct a trading strategy to take advantage of the gains possible.

Reference no: EM133430251

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