Question: Suppose call and put prices are given by Strike 50 55 Call premium 9 10 Put premium 7 6 What no-arbitrage property is violated? What

Suppose call and put prices are given by Strike 50 55 Call premium 9 10 Put premium 7 6 What no-arbitrage property is violated? What spread position would you use to effect arbitrage? Demonstrate that the spread position is an arbitrage.

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