In the lecture example, a European call option on a with a $40 strike and 1 year to expiration. The stock pays no dividends, and its currentprice is $41. The continuously compounded risk-free interest rate is 8%. The stock price in 1 year is either $60 or $30. Using the binomial model

we solve the call option price is $ 8.871. If the market price for the call is $8. You could set up the arbitrage portfoliop as follows, to _____ theoption, _____ the stock 2/3 of share and _____ $ 18.462 at 8%.

Group of answer choices

short, short, borrow

short, long, lend

long, short, borrow

long, short, lend