a Question #38 (10 points) Assume a call option expires in 9 months. The strike price of the call option is $120. The risk-free rate is 6%. The price of the call option is $7.15. No dividends are expected. The current market price of the underlying stock is $122.35. (1) Why is there an arbitrage opportunity? Be sure to provide numerical support. (2 points) (2) What action(s) should the investor take given the arbitrage opportunity? (2 points) (3) What would be an investor's profit if the stock price at maturity was less than the strike price (use a price of $116.74)? [3 points] (4) What would be an investor's profit if the stock price at maturity was greater than the strike price (use a price of $123.50)? [3 points] Note: please show your work and provide numerical support for your answers