Can you make a profit without taking any risk

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Reference no: EM132067417

You have the quotations for the following positions:

1. long or short € (Current rate is $2.1/€)

2. long or short call (exercise price is $2.1/€, the premium is $.05/€ for both long and short)

3. long or short put (exercise price is $2.1/€, the premium is $.03/€ for both long and short)

Is there an arbitrage opportunity here? In other words, can you make a profit without taking any risk? Show me the graphs and the appropriate numbers.

Reference no: EM132067417

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