The current price of ABC stock is $50. The term structure of interest rates (continuously compounded) is

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The current price of ABC stock is $50. The term structure of interest rates (continuously compounded) is flat at 10%. What is the six-month forward price of the stock? Denote this as F. The six-month call price at strike F is equal to $8. The six-month put price at strike F is equal to $7. Explain why there is arbitrage opportunity given these prices.

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