number 3 and 4

Question #36 (10 points) Assume the strike price of a call option is $15. The current market price of the underlying stock is $18.75. The option expires in 6 months and the risk-free rate is 6%. The price of the call option is $3.50. No dividends are expected. (1) Why is there an arbitrage opportunity? Be sure to provide numerical support. (2 points) (2) What action(s) should the investor take given the arbitrage opportunity? (2 points) (3) What would be an investor's profit if the stock price at maturity was less than the strike price (use a price of $12.25)? (3 points) (4) What would be an investor's profit if the stock price at maturity was greater than the strike price (use a price of $21.05)? (3 points]