# Tag Info

In both cases, you should argue along the lines of options arbitrage. If you think an asset (or a portfolio) is relatively cheap (as in: arbitrageable) then you simply buy low, sell high. In your first case, it seems that the call is too cheap, as in: $$C^E<P^E+S-Ke^{-rT}$$ So let's buy the call, sell a put, short a unit of stock, and borrow some money: ...