16. A call option has X-$45 and expire in 115 days. The risk-free rate is 4.5%. The call is priced at $9.00. A put option has X-$45 and is priced at $3.75. The underlying asset is priced at $50. Which of the following statement is correct? A. There is no arbitrage opportunity B. There is arbitrage loss and whoever invest will lose a lot C. There is arbitrage profit and whoever invest will gain a lot D. It cannot be determined whether or not arbitrage opportunity exist E. None above 17. The three-month call with X-$90 is priced at $5. The three-month call with X-$100 is priced at $3. What is the maximum possible profit on a bullish spread strategy? A. $5 B. $7 C. $8 D. $10 E. None above 18. For a put option, which one of the following factor will increase the put option's premium for sure? A. Longer expiration date B. Higher Volatility C. Lower Exercise Price D. All above E. None above 19 Which of the following statement is true? A. For any type of option strategy, the payoffs will never be negative B. For any type of option strategy, the profit will never be negative C. There is no option strategy that guarantees positive profit D. There is no option strategy that guarantees positive payoffs E. None above 20. In a covered call strategy: A. The payoff is greater than the profit B. The payoff is the same as the profit C. The payoff is lower than the profit D. The payoff and profit has no relation E. None above 4