Question: (27) (Put Call Parity - partial) Suppose you start a PC Parity examination. You note that the actual Stock price is 100, and that the

(27) (Put Call Parity - partial) Suppose you start a PC

(27) (Put Call Parity - partial) Suppose you start a PC Parity examination. You note that the actual Stock price is 100, and that the "synthetic stock price is 99. That is using actual Put and Call prices, and actual Interest Rate the stock price should be 99." (a) Given these numbers, What should the arbitrage profit be? (b) What should you buy / sell / do TODAY to begin the arbitrage trade. (Skip date T details)

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