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The price of a European call that expires in nine months and has a strike price...

The price of a European call that expires in nine months and has a strike price of $40 is $6.80. The underlying stock price is $41, and a dividend of $1.50 is expected in four months. The term structure is flat, with all risk-free interest rates being 10%. a. What is the price of a European put option on the same stock that expires in nine months and has a strike price of $40? b. Explain in detail the arbitrage opportunities if the European put price is $1.20. How much will be the arbitrage profit?

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