A one-year maturity European call option on a non-dividend-paying stock with a strike of K1 = 10 is currently selling for $5. The current stock price is $4 and the riskless interest rate is 1% (annualized with continuous compounding). Is there an arbitrage opportunity with these given prices? Yes, the call option is undervalued. No, there is no arbitrage opportunity Yes, the call option is overvalued