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Adrian is an arbitrageur and looks for arbitrage opportunities in option markets. Currently, Adrian finds...

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Adrian is an arbitrageur and looks for arbitrage opportunities in option markets. Currently, Adrian finds that a 1-year European put option on a non-dividend-paying stock is selling for $4. The stock price is $44, the strike price is $50. The risk-free interest rates are 2% per annum for all maturities (continuously compounded). If there exists an arbitrage opportunity, please state clearly the arbitrage strategy and the gain. If not, please explain why. ( 5 marks)

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