Stock price = 10

Strike price = 8

Time to maturity = 1 year

risk-free rate = 10% p.a.

The price of a call calculated = 2.76

If the market price of call is $2.70, what would be the arbitrage profit when the stock price is 7 in one year?

Select one:

a. 8

b. 7.30

c. 8.07

d. 1.07

e. 2.70