Does put-call parity hold if not then describe the


An institutional trader is tasked with seeking out arbitrage opportunities and is particularly focused on price discrepancies between put and call options on Apple Inc. (Nasdaq: AAPL) stock. The institutional trader finds a European call option trading at $23.00, and a European put option trading at $5.00, when the stock price is $175.00. Both options have an exercise price of $160.00, and a maturity of six months. The risk-free interest rate is 2.0% (continuously compounded). • Does put-call parity hold? If not, then describe the arbitrage opportunity.

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Financial Management: Does put-call parity hold if not then describe the
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