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1. Given the following information, does an arbitrage opportunity exist? If so, how would an arbitrageur take advantage of this opportunity?

1. Given the following information, does an arbitrage opportunity exist? If so, how would an arbitrageur take advantage of this opportunity?

Call price $3.60
Put price $0.40
Market stock price $42.00
Exercise price $40.00
Expiration 90 days
T-bill rate 6.00%

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