Throughout this problem assume that all cash flows are realized at the end of any given period. All periods are one year long. The risk free interest rate is 6% per year, while the cost of equity is 7% per year for all companies under consideration.

The stock price for company C is described by the binomial model. Company Cs current stock price is $300, and company C does not make any dividend payments. Next year, the stock price of company C can either increase by 20% or decrease by 10%. A put option with an exercise price of $310 is traded on the stock of company C.

You buy some of the put options. You construct a risk-free portfolio consisting of your put options and some of the stocks on company C.

The call option on the stock of company C with the same exercise price as the put option is traded at $10.

Question: Does the call premium fulfill the put-call parity? Show in detail how you can obtain an arbitrage profit.