Jamison has two call options on the underlying with initial price and strike . One option is European and the other is American. A European option is one where you can only exercise it at expiry, while an American option can be exercised at any time.
The European option is valued at while the American option is valued at . You also have access to bonds with discount rate . The underlying pays no dividends.
What is the arbitrage? Give the answer in the form of the initial credit you receive.