You happen to be checking the newspaper and notice an arbitrage opportunity. The current stock price of Intrawest is $ 211 per share and theone-year risk-free interest rate is 7 %. Aone-year put on Intrawest with a strike price of $ 19 sells for $ 3.19, while the identical call sells for $ 6.72. Explain what you must do to exploit this arbitrage opportunity.

Select Best Choice:

A. The strategy would be to sell the calloption, buy the put and thestock, and borrow $ 17.76. The net benefit is $ 0.29.

B. The strategy would be to buy the calloption, sell the put and thestock, and borrow $ 17.76. The net benefit is $ 0.29.

C. The strategy would be to sell the calloption, buy the put and thestock, and borrow $ 19. The net benefit is $ 0.29.

D. The strategy would be to sell the calloption, buy the put and thestock, and borrow $ 17.76. The net benefit is $ 1.53.