Question: Can someone explain the steps to the answer? Use put call parity to determine the size of the arbitrage profit AT TIME T 3/12 arising

 Can someone explain the steps to the answer? Use put call

Can someone explain the steps to the answer?

Use put call parity to determine the size of the arbitrage profit AT TIME T 3/12 arising from the following situation. All options are European. So = $19.09 T-3/12 (for both the call and the put K-20 (for both the call and the put) C $2.69 p $3.42 10% (cont. comp. annual rate) Dividend = $1 in one month required precision O.010.01) 17.8447 0.7 margin of error +/-0.01 Use put call parity to determine the size of the arbitrage profit AT TIME T 3/12 arising from the following situation. All options are European. So = $19.09 T-3/12 (for both the call and the put K-20 (for both the call and the put) C $2.69 p $3.42 10% (cont. comp. annual rate) Dividend = $1 in one month required precision O.010.01) 17.8447 0.7 margin of error +/-0.01

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