Graph payoff diagrams of the following positions assuming the holding period and option expirations are in 3 months.

a. Long a share of stock in ABC (2 points)

b. Short a call in ABC with a strike price of $50 (2 points)

c. Borrow the PV of $50 at the risk-free rate (8% annually) (2 points)

d. a, b, and c together as a portfolio (5 points)

e. Given the following prices, is there an arbitrage opportunity, and if so, how would you exploit it? (7 points)

S = $55

C = $6.73

P = $2.10

Risk-free rate = 8% annually