1. (10 points) An asset has value St, $120 at 1-0, and will have unknown whe ST at time T. A call option with strike K- $100 is currestly (t0) selling for Co-$21, and the discount tartot kr the period 0 to T is e-r-0.99-99/100The risk-free rate r. Consider the poetfolio obtained by selling (short) one unit of the asst at -o, buying one call option, and investing the preseut alue of the strike K in a bank at the risk-free ate. Show there is an arbitrage opportunity. Give all actions at-T. and discuss the type of arbitrage b) (550 only) If the call option price is instead Co-$0, dons the arbitrage opportumity still xist? What about Co-$227 Discuss the type of arbitrage