Question: Suppose a short put option is trading at $3.50. Using the Black-Scholes formula, you believe the correct price should be $3.58. Which of the following

Suppose a short put option is trading at $3.50. Using the Black-Scholes formula, you believe the correct price should be $3.58. Which of the following is an important position in the arbitrage strategy at time 0?

Short call option

Long put option

Long call option

Borrow at the risk-free rate

Short put option

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