26. A call option on a stock is trading for $1.80. The option matures in two months. The stock is currently trading for $52 and will pay a dividend of $2 in one month. The risk-free rate of interest (on investments of all maturities) is 12%. Finally, suppose that the strike price of the option is $50. Examine whether there is an arbitrage opportunity in this problem. If so, show how it may be exploited to make a risk-less profit.
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