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You have XYZ trading at $42. European 6-month 40 calls and puts are traded at:...

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Finance

You have XYZ trading at $42. European 6-month 40 calls and puts are traded at:

Call Put

Bid/ask. 5 / 5.5 2.75 / 3.25

Assuming the risk free rate is 0%, do you see any arbitrage opportunity? Show your calculation and formula

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