4. The current stock price of Company Y is S1,000. It is certain that the stock pays $50 dividends in 1 month. A European at-the-money put option with 3 months to maturity is traded for $150. A European at-the-money call option with 3 months to maturity is traded for 8100. The term structure of interest rates is flat and the short rate is constant and equals 3% (..). (a) Is there an arbitrage opportunity? If so, describe an investment strategy that pays off today and has for sure zero cash flows at any time in future. (b) What level in the short rate ensures that markets are arbitrage free? 4. The current stock price of Company Y is S1,000. It is certain that the stock pays $50 dividends in 1 month. A European at-the-money put option with 3 months to maturity is traded for $150. A European at-the-money call option with 3 months to maturity is traded for 8100. The term structure of interest rates is flat and the short rate is constant and equals 3% (..). (a) Is there an arbitrage opportunity? If so, describe an investment strategy that pays off today and has for sure zero cash flows at any time in future. (b) What level in the short rate ensures that markets are arbitrage free