2. A European put option written on stock has strike price $12 and expires at tline t = 1. At the current time t = 0 the underlying stock has price S(0) = $8 and at expiry the price will be either S(1, 1) = $15 or S(1, 1) = $7. The interest rate over t = 0 to t = 1 is r = 1 (a) Show that there is no arbitrage opportunity