[14 points] You are given the following information on 1-year options on stock S: Strike Premium Call 16.70 10.45 90 100 110 Put 2.31 5.57 10.68 The current stock price is 100, and the continuously compounded risk-free rate, r, is 5%. a) 16 Points] Using the options above, create the closest zero-cost collar you can. Graph the profit function for this collar and be sure to label all critical points. I b) 13 Points Suppose you wanted to make this a truly zero-cost collar, and you wanted to keep the put option the same as the one selected in part (a). What direction would you need to adjust the strike price of the call option in order to make the collar zero- cost. Justify your answer. c) 15 Points Suppose that C(110) = 7,00. State the positions you need to take to exploit the arbitrate. Calculate the arbitrage profit that can be made. [14 points] You are given the following information on 1-year options on stock S: Strike Premium Call 16.70 10.45 90 100 110 Put 2.31 5.57 10.68 The current stock price is 100, and the continuously compounded risk-free rate, r, is 5%. a) 16 Points] Using the options above, create the closest zero-cost collar you can. Graph the profit function for this collar and be sure to label all critical points. I b) 13 Points Suppose you wanted to make this a truly zero-cost collar, and you wanted to keep the put option the same as the one selected in part (a). What direction would you need to adjust the strike price of the call option in order to make the collar zero- cost. Justify your answer. c) 15 Points Suppose that C(110) = 7,00. State the positions you need to take to exploit the arbitrate. Calculate the arbitrage profit that can be made