4. Suppose that a stock, XYZ, is trading at $60.00 and has an estimated volatility of 40% and an expected return of 12%. The current risk-free rate is 4.00% (continuous compounding). A) What is the Black-Scholes price of a European call option expiring in 6 months with exercise prices $70 ? . B) Suppose you can buy/sell this option for $4.00, fully describe the arbitrage opportunity that exists. C) Suppose you engage in your strategy and the stock moves to $90 in the next instant. What is your new hedge? Would you expect your strategy to be more or less successful than expected (according to Black-Scholes)? 4. Suppose that a stock, XYZ, is trading at $60.00 and has an estimated volatility of 40% and an expected return of 12%. The current risk-free rate is 4.00% (continuous compounding). A) What is the Black-Scholes price of a European call option expiring in 6 months with exercise prices $70 ? . B) Suppose you can buy/sell this option for $4.00, fully describe the arbitrage opportunity that exists. C) Suppose you engage in your strategy and the stock moves to $90 in the next instant. What is your new hedge? Would you expect your strategy to be more or less successful than expected (according to Black-Scholes)