Assume that the yield curve is flat and the annual risk$-$free rate is $6\%.$

cent.

$

Similarly, calculate the $"$no arbitrage" price of a call with an exercise price of $$45.$ Do not round intermediate calculations. Round your answer to the nearest cent.

$

$

The actual put$-$call price differential at a strike price of $$40$ : $

The

$|$ price is undervalued relative to the

option. The arbitrage transaction requires the purchase of the

option while shorting the

option. We can obtain an arbitrage profit of $