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Intro A European call option on Kroger stock and a European put option on the same stock both expire in 0.5 years and have a
Intro A European call option on Kroger stock and a European put option on the same stock both expire in 0.5 years and have a strike price of $46. The call option costs $1.94 and the put option costs $3.222. Kroger does not pay dividends and its current stock price is $45.26. The risk-free rate is 1% (EAR). Part 1 || Attempt 1/17 for 10 pts. Is there an arbitrage opportunity, and if so, what should you do? O Yes, you should sell the put option. O No, there is no arbitrage opportunity. Yes, you should sell the call option. Submit Part 2 |Attempt 1/17 for 10 pts. What should you do to lock in a riskless profit right now? O Sell the put, buy the call, short the stock and borrow the present value of the strike price. O Sell the put, buy the call, buy the stock and invest the present value of the strike price. O Sell the put, buy the call, buy the stock and borrow the present value of the strike price. O Sell the put, buy the call, short the stock and invest the present value of the strike price. Submit Part 3 | Attempt 1/18 for 10 pts. What is your riskless profit right now for each option? 2+ decimals Submit
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