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Given the following data as of the close of trading on 10/26/18: Quest Diagnostics (DGX): 91.47 T-bill: Asked 2.28, Days to Maturity 84 Options on

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Given the following data as of the close of trading on 10/26/18: Quest Diagnostics (DGX): 91.47 T-bill: Asked 2.28, Days to Maturity 84 Options on DGX: expire January 18, 2019 23.7 70 0.35 75 80 0.55 12.9 8.7 5.2 2.55 1.1 85 1.95 90 95 100 3.4 6.1 9.7 0.45 105 14.2 Show that every option in the table is priced above the lower bound (these are American options). Fill out the following table: a. Lower bound, put Strike 70 75 80 85 90 95 100 105 Lower bound, call b. Imagine now that the call option struck at $80 trades at a premium of S11.00 (instead of $12.90) Show that you can earn an arbitrage profit from buying the option and exercising it immediately

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