High Flyer Stock currently sells for $48. A one-year call option with strike price of $55 sells for $9, and the risk free interest rate is 6%. 7. To your amazement, this put option is actually traded at $14. Is the put option fairly priced, overvalued or undervalued? What would you do to exploit this mis-pricing? Formulate your strategy and work out the payoff worksheet when future stock price is equal to $0, $50, and $100 respectively. What would be your arbitrage profit when future stock price is equal to $0, $50, and $100? $0.78, $1.11, $2.32 b. $0.78, $0.78, $0.78 d. $2.32, $2.32, $2.32