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A stock has a time-t price of S(t). You are given the following values of S(t) t 0 0.25 0.5 0.75 1 1.25 1.5 1.75 S(t) 100 107 102 96 94 110 115 120 2 108 Consider Asian options that are based on quarterly stock prices over 2 years and matures two years from now. Calculate the payoff of a 100-strike arithmetic average price call. A stock has a current price of 80 and pays continuous dividends at a rate of 3% per year. The continuously compounded risk-free interest rate is 6%. The price of a one-year call option with a strike price of 85 is 5.59. If the price of a one-year put option with a strike price of 85 is quoted as 9, determine if an arbitrage opportunity exists, and if it does, describe how you would take advantage of it. Buy the call, short 0.9704 shares of stock, lend 80.05 B Sell the call, buy 0.9704 shares of stock, borrow 80.05 Short 0.9704 shares of stock, borrow 80.05 D Buy the call, short 0.4852 shares of stock, lend 85.00 E No arbitrage opportunity exists