1. A 6-month, $75 call option on Teller stock has an option premium of $12.50. The 6-month, $75 put option has an option premium of $5.50. The risk-free rate is 4.0%. What must be the price of Teller stock? A. $79.26 B. $80.54 C. $82.00 D. $86.04 E. $87.50 2. Suppose you purchase one Texas Instruments August $95 call contract quoted at $10.55 and write one Texas Instruments August $110 call contract quoted at $11.25. If, at expiration, the price of a share of Texas Instruments stock is $100, your profit would be _________. A. -$555 B. -$430 C. -$55 D. $70 E. $570 3. A stock is priced at $59, three-months calls and puts with an exercise price of $55 are available. The calls have a premium of $4.27 and the puts cost $0.95. The risk free rate is 5%. If you wished to form a trade strategy to exploit the mispriced puts you should ____________. A. buy call; and sell put B. write call; and buy put C. buy put and buy stock; write call and borrow the present value of the exercise price D. buy call and buy bonds with 3-month maturity and par value of $55; short stock and write put E. there is no arbitrage opportunity in this scenario