Is there an arbitrage opportunity

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Reference no: EM13263772

A one year European put option and a one year European call option with a strike price of $59 are both priced at $5 in the market a one year futures price is currently traded at $58. The risk free rate is 7% per annum. Is there an arbitrage opportunity, if so, show the gain on the arbitrage.

Reference no: EM13263772

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