Recommend profitable strategy

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Reference no: EM131133693

Derive the Put-Call Parity for the following situation: Stock Price = $80; Strike Price = $70; Risk free rate =3%; Call Price = $16 (1 yr expire); Put Price = $2 (1 yr. expire)

Then:

a) Recommend a profitable strategy

b) Present a chart of: the outcome of the strategy, and its payoffs at maturity in 1 year.

Reference no: EM131133693

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