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Let S=100,K=95,r=8%,T=0.5, and =0. Let u=1.3,d=0.8, and n=1. 1. Suppose you observe a put price of 8 . What is the arbitrage? (specify the quantities

image text in transcribed Let S=100,K=95,r=8%,T=0.5, and =0. Let u=1.3,d=0.8, and n=1. 1. Suppose you observe a put price of 8 . What is the arbitrage? (specify the quantities and values of the assets in your arbitrage portfolio.) 2. Suppose you observe a put price of 6 . What is the arbitrage? (specify the quantities and values of the assets in your arbitrage portfolio.)

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