Problem The market price of a European call that matures in six months and has a strike price of $30 is $2. The underlyi

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Problem The Market Price Of A European Call That Matures In Six Months And Has A Strike Price Of 30 Is 2 The Underlyi 1 (80.44 KiB) Viewed 27 times

I want a easy explanation for problem #2.
Please write it down in a neat way. Also, please do not copy any
answers on the internet. (I've already looked into so
many answers online but couldn't understand)
Problem The market price of a European call that matures in six months and has a strike price of $30 is $2. The underlying stock price is $29. A dividend of $0.50 is expected in two months and the same amount of the dividend is also expected in five months. The annualized risk-free interest rate is 10%, which is constant. What is the price of a European put option that expires in six months and has a strike price of $30 if there is no arbitrage opportunity? Problem Is there an arbitrage opportunity in the above problem if the European put price is $3? If there is an arbitrage opportunity, then make an arbitrage strategy that makes today's cash flow zero.