Q1) (10 Points) Currently a stock trades at $48 a share. You can buy a 6 month European call option for $5 and a 6 month Put option for $8, both with a strike rate of $50. The annual risk free rate is 2%. Using discrete compounding: a) Identify any mispricing between the price of the actual call option and one that you can construct synthetically. b) If you find that an arbitrage opportunity exists how would you execute it to capture the riskless profit? c) Given the current pricing of the options, how large would the dividend 5 months from now need to be, to make these pricing levels consistent with no arbitrage? Ignore any mispricing of the current options that would be needed with the introduction of a dividend