Use the following information for scenario below: Coca-Cola currently has a stock price of $46.75. It also has eight options available with the following Expiration Date, Strike Price (Exercise Price), and Option Price. For Example, you can buy a Feb 45 Call for $2.6 (or you could sell it for $2.6). The risk free rate between now and Feb is 1% while the risk free rate between now and May is 2%. How could you earn a risk-free profit using the May 50 options? If you buy the May $45 Call, Sell the May $45 Put, Sell the May $50 Call, and Buy the May $50 Put, then it will cost you _____ and you will receive _____ at expiration no matter what the stock price ends up being.

Expiration Strike Discounted Call Put

Month Price Value Price Price

Feb 45 44.55 .35

Feb 50 49.50 .2 3.30

May 45 3.2 .57

May 50 49.02 .6 3.50