2. (20 points) In the l-period binomial model with a period length of 3 months, you are given the following data: S(0) = 20, Su = 24, S2 = 16,r = 0.05, and 8 = 0.08. A 3-month European call with strike price 20 has current a market value of 2. Determine whether or not this is an arbitrage opportunity and explain how you can take advantage of it if it is. 2. (20 points) In the l-period binomial model with a period length of 3 months, you are given the following data: S(0) = 20, Su = 24, S2 = 16,r = 0.05, and 8 = 0.08. A 3-month European call with strike price 20 has current a market value of 2. Determine whether or not this is an arbitrage opportunity and explain how you can take advantage of it if it is