2. An 8-month at-the-money European call option on a non-dividend-paying stock is currently selling for NOK 5.48 while a

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2. An 8-month at-the-money European call option on a non-dividend-paying stock is currently selling for NOK 5.48 while a

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2 An 8 Month At The Money European Call Option On A Non Dividend Paying Stock Is Currently Selling For Nok 5 48 While A 1
2 An 8 Month At The Money European Call Option On A Non Dividend Paying Stock Is Currently Selling For Nok 5 48 While A 1 (18.92 KiB) Viewed 7 times
2. An 8-month at-the-money European call option on a non-dividend-paying stock is currently selling for NOK 5.48 while a put with the same terms is selling for NOK 3.96. The underlying stock price is NOK 42.50, and the continuously-compounded risk-free rate is 5% per year. Is there an opportunity for you as an arbitrageur? If so describe the trades you would undertake and the profit you would make; if not explain why not.
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