Show that there is an arbitrage opportunity

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Suppose BJ's stock price is currently $50 and a dividend of $2 is expected in two months. A six-month European call option on the stock with exercise price of $48 is selling for $5. A six-month European put option on the stock with exercise price of $48 is selling for $4. The risk free interest rate is $10% per annum.

Show that there is an arbitrage opportunity (L > R or R < L)

Reference no: EM131063251

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