A call option on Jupiter Motors stock with an exercise price of $75 and one-year expiration is selling at $3. A put option on Jupiter stock with an exercise price of $75 and one-year expiration is selling at $2.50.
A) If the risk-free rate is 2% and Jupiter pays no dividends, what should the stock price be?
B) Is there an arbitrage opportunity if the stock price is $73? If so, how to exploit it?