Trading strategy to take advantage of the opportunity

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Reference no: EM131851240

The current price of a share of ABC, Inc. is $31 and the riskless rate of return is 10 percent per annum (annual compounding). Consider a European put and a European call sharing the common exercise price of $30 and the common maturity of 3 months. The price of the put is $2.25 and the price of the call is $2.35. Are there any arbitrage opportunities? If so, construct a trading strategy to take advantage of the opportunity.

Reference no: EM131851240

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