What misunderstanding do Viola and Antonio have in Twelfth Night?

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In Act III, scene iv, Antonio mistakes Viola (Cesario) for Sebastian. He enters the scene as Sir Toby is ready to duel with Viola (Cesario) and offers to take her place.

As he is arrested by the police, he asks her for his purse and she is taken aback by the seemingly odd request. However, she does offer to lend Antonio half of her money because of his interference in the duel.

Antonio is offended that his friend Sebastian does not honour him with this request and is ready to "take back" all of the kind things he has done for him. Viola (Cesario) is confused because she does not know Antonio and thinks he is being ungrateful to her after her offer of help.

At the end of this encounter Antonio tells everyone who will listen that he rescued this young man (Sebastian) from death because he thought that he was as beautiful inside as he was attractive. He now states that he must have been wrong in his assumption.

Viola (Cesario) is left in a state of excitement at the possibility of her brother's safety.

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