1. A stock is trading at $74.17. The call option with the strike price of $75.00 is trading at a premium of $1.02. The put option with the same strike price is trading at $2.69. The time to expiry is 141 days and the continuously compounded return is 5.12%

a) Calculate the profit from the arbitrage opportunity using calls

b) Calculate the profit from the arbitrage opportunity using puts

c) Determine the price at which the call should trade for there to be no arbitrage

2. A stock is trading at $65.17. The call option with the strike price of $65.00 is trading at a premium of $2.02. The put option with the same strike price is trading at $1.85. The time to expiry is 14 days and the continuously compounded return is 0.12%.

a) Calculate the profit from the arbitrage opportunity using calls

b) Calculate the profit from the arbitrage opportunity using puts

c) Determine the price at which the put should trade for there to be no arbitrage

d) Determine the price at which the call should trade for there to be no arbitrage