How would you implement arbitrage opportunity

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Reference no: EM131583892

Suppose the European call and put options with strike price $20 and maturity date in 1 month cost $2.0 and $1.0, respectively. The underlying stock price is exist18 and the risk-free interest rate is 0.08%.

(a) Is there an arbitrage opportunity?

(b) If yes, how would you implement arbitrage opportunity?

Reference no: EM131583892

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