Question 4 (20 points) A stock is currently trading at $42. The one-year risk free interest rate is 4%. A 9-month put option with a strike price of $44 is currently trading at $4.85. A) If a call written on the same stock with the same strike and maturity were trading at $5.75, is an arbitrage opportunity possible? If so, demonstrate, using a payoff table, how a trader could create an arbitrage, assuming perfect capital markets. (15 points) B) If the trader could not borrow or lend at the risk free rate, how what is the maximum annual rate that they could borrow money at, or the minimum annual rate that they could earn on an investment to earn an arbitrage profit? (5 points)