Part 1.Explain the effect of dividends on both call and put premiums. Explain the effect of dividends on both call and put exercise prices. If you owned a put option that expired in 90 days, would you prefer to have a $1 dividend on the stock in 10 days or in 50 days. Explain your answer.

Part2. Explain the effect of interest rates and volatility on both calls and puts. Calculate T if today is March 10 and the option ends on September 5.

part3. Find the 2 different arbitrage opportunities in this table. Explain why these are arbitrage opportunities. Explain (no need for a table) how to capture the profit on these opportunities.

	Premiums
Exercise Price	Calls	Puts	T	risk free rate
150	5.5799	2.8909	0.0822	5.00%
155	3.4278	5.0017	0.0822	5.00%
160	1.2445	10.1298	0.0822	5.00%
Stock price	155	American Options

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