Does put-call parity hold

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An institutional trader is tasked with seeking out arbitrage opportunities and is particularly focused on price discrepancies between put and call options on Apple Inc. (Nasdaq: AAPL) stock. The institutional trader finds a European call option trading at $23.00, and a European put option trading at $5.00, when the stock price is $175.00. Both options have an exercise price of $160.00, and a maturity of six months. The risk-free interest rate is 2.0% (continuously compounded). • Does put-call parity hold? If not, then describe the arbitrage opportunity.

Reference no: EM132005671

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