Consider a put and a call, both on the same underlying stock that has a present price of $34. Both options have the same identical strike price of $30 and time-to-expiration of 100 days. Assume that there are no dividends expected for the coming year on the stock, the options are all European, and the interest rate is 10%. If the put premium is $2.00 and the call premium is $7.00, which portfolio would yield arbitrage profits? Hint: Check your answer with an arbitrage table.

A.buy the call, buy a bond, write the put, sell stock buy a put,

B.buy stock, write the call, sell bond

C.buy the put , buy the call, sell stock, sell a bond buy the stock,

D.buy the bond, write the put, write the call

E.no arbitrage is available for these asset prices