Problem 3. Let us consider the following European call and put options written on the same stock and with the same maturity T = 1 year in the financial market: Price Type Strike Price Call 80 Call 90 Call 100 80 Put 90 25 20 16 16 22 Put Suppose that the continuous compounding interest rate r = 0.05 in the market. Can you choose a portfolio using some of the options from the table and the Bank account to find an Arbitrage profit? If yes, be specific of your arbitrage portfolio. If no, prove your argument. [10 marks] Problem 3. Let us consider the following European call and put options written on the same stock and with the same maturity T = 1 year in the financial market: Price Type Strike Price Call 80 Call 90 Call 100 80 Put 90 25 20 16 16 22 Put Suppose that the continuous compounding interest rate r = 0.05 in the market. Can you choose a portfolio using some of the options from the table and the Bank account to find an Arbitrage profit? If yes, be specific of your arbitrage portfolio. If no, prove your argument. [10 marks]