3. A European call option expiring in 1 -year with a strike price of 50 has a premium of 5.00 . The underlying stock (S0=50) pays continuous dividends at a 2% rate proportional to its price. The continuously compounded risk-free rate is 6%. The stock's price is modeled using a one-period binomial tree with an up price of 65 and a down price of 40 . find price + compre Use the replicating portfolio to determine if arbitrage is available. If so, how much could be made and how would it be arbitraged? A. Long the call, short the stock, and borrow at risk free making $1.42 B. Long the call, short the stock, and borrow at risk free making $1.80 C. Long the call, short the stock, and lend at risk free making $1.42 D. Long the call, short the stock, and lend at risk free making $1.80 E. No arbitrage is available in this situation. 3. A European call option expiring in 1 -year with a strike price of 50 has a premium of 5.00 . The underlying stock (S0=50) pays continuous dividends at a 2% rate proportional to its price. The continuously compounded risk-free rate is 6%. The stock's price is modeled using a one-period binomial tree with an up price of 65 and a down price of 40 . find price + compre Use the replicating portfolio to determine if arbitrage is available. If so, how much could be made and how would it be arbitraged? A. Long the call, short the stock, and borrow at risk free making $1.42 B. Long the call, short the stock, and borrow at risk free making $1.80 C. Long the call, short the stock, and lend at risk free making $1.42 D. Long the call, short the stock, and lend at risk free making $1.80 E. No arbitrage is available in this situation