You observe the following call options for different strike prices: Strike Price 50 55 Call Premium 18 12 Is there an opportunity for arbitrage? Why or why not? Yes, because the call premium is not a convex function of strike price, Yes, because the call premium is increasing for increasing strike prices. There is not enough information to say whether or not there is opportunity for arbitrage. Yes, because the change in call premium exceeds the change in strike price. No, because call prices always follow the arbitrage-free principle