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Q3 p=4% (cc), T = 4 months. Given the following table of option prices Strike Price Call Price K1 = 69.00 6.29 K2 = 73.00

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Q3 p=4% (cc), T = 4 months. Given the following table of option prices Strike Price Call Price K1 = 69.00 6.29 K2 = 73.00 5.16 K3 = 74.00 4.50 a) Find so that K2 = XK1 + (1 - 2)K3. b) Is there a possible arbitrage? Justify your answer (by constructing an arbitrage portfolio if possible)

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