The current price of ABC stock is $50. The term structure of interest rates (continuously compounded) is flat at 10%. What is the six-month forward

The current price of ABC stock is $50. The term structure of interest rates (continuously compounded) is flat at 10%. What is the six-month forward price of the stock?  Denote this as F. The six-month call price at strike F is equal to $8. The six-month  put price at strike F is equal to $7. Explain why there is arbitrage opportunity given  these prices. 

Das, Sanjiv; Rangarajan Sundaram. Derivatives (The Mcgraw-hill/Irwin Series in Finance, Insureance and Real Estate) (p. 214). McGraw-Hill Higher Education. Kindle Edition. 

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Homework JWI 575: New Business Ventures and Entrepreneurship Academic Submissions and Evaluation© Strayer University. All Rights Reserved.

Homework  JWI 575: New Business Ventures and Entrepreneurship Academic Submissions and Evaluation © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.