Describe your arbitrage strategy

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You sense an put-call arbitrage possibility on Barayaran Export Enterprises stock. The current risk free interest rate is 2%. The time to expiration is 18 months. The strike price is 75. The call option sells for 6.479, while the put option sells for 9.334. The price of the stock is X. As X runs from 65 to 75, carefully describe your arbitrage strategy. Show how much profit you will make in 18 months on a nice graph with 50 data points. Do NOT turn in a huge tree- killing table.

Reference no: EM131997764

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