i. Sinam shares are currently trading at RM10.80 in the stock market. 3-month European call and put options with RM 10.00 exercise price are being quoted at RM1.50 and RMO.90 respectively. The risk-free rate is currently at 10% per annum. a) Using put-call parity and applying both mathematical and diagram method prove that there are mispricing on the spot price, call and put options. [12 marks] b) Indicate what arbitrage strategy you would use and compute the profit amount you can make for one lot/contract when 3 months later, Sinam share is at RM9.00. [8 marks] i. Option on Riva stock has a delta value of 0.50. The Riva stock price increased from RM 43 to RM 45 on 6 September 2018. Estimate the option price changes. i. Sinam shares are currently trading at RM10.80 in the stock market. 3-month European call and put options with RM 10.00 exercise price are being quoted at RM1.50 and RMO.90 respectively. The risk-free rate is currently at 10% per annum. a) Using put-call parity and applying both mathematical and diagram method prove that there are mispricing on the spot price, call and put options. [12 marks] b) Indicate what arbitrage strategy you would use and compute the profit amount you can make for one lot/contract when 3 months later, Sinam share is at RM9.00. [8 marks] i. Option on Riva stock has a delta value of 0.50. The Riva stock price increased from RM 43 to RM 45 on 6 September 2018. Estimate the option price changes