4. (a) A stock is currently priced at $66.25. A European call option on the stock, with time to expiry of 136 days and strike of $50, is trading at $16.75. The current interest rate is 8%. The stock will provide a dividend of $0.75 in 58 days. 2 Is there an arbitrage opportunity? If yes, devise an appropriate strategy to profit from this opportunity [5] (b) Consider an American call option on a dividend paying stock with strike K, expiry T. Let the continuously compounding interest rate be r. The stock is currently worth So, and will pay one dividend of D at time t(0