Is there an arbitrage opportunity with the following assets: the price of the XYZ stock with no dividends is $100; the European put options at $98 with six-month maturity are sold for $3.50;

the European call options at $98 with the same maturity are sold for $8; T-bills with the same maturity are sold for $98. Hint:

Check the put-call parity.

**3. Compare the Ito’s and Stratonovich’s approaches for derivation of the Black-Scholes equation (consult [12]).