1. A two-month European call option on a stock is currently selling for $2.50. The stock price is $50, the strike price is $46, and a dividend of $1.00 is expected in one month, the risk-free interest rate is 6% per annum. What opportunities are there for an arbitrageur? Describe the arbitrage profits. Hint: Pc 2 (stock costs). - PV(K) 1. A two-month European call option on a stock is currently selling for $2.50. The stock price is $50, the strike price is $46, and a dividend of $1.00 is expected in one month, the risk-free interest rate is 6% per annum. What opportunities are there for an arbitrageur? Describe the arbitrage profits. Hint: Pc 2 (stock costs). - PV(K)