Make in order to earn these riskless profits

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Reference no: EM131995002

Suppose that today there is a one-year futures contract on gold with a price of $1100 per ounce. Today there are also one-year call options on gold with an exercise price of $1100 per ounce and one-year put options on gold with an exercise price of $1100 per ounce. If the call option has a premium of $5 and the put option has a premium of $10, are there riskless profits to be made? If so explain the transactions you would need to make in order to earn these riskless profits?

Reference no: EM131995002

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