Find maturity of the options

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As an interview for a Co-op position, Isabelle Smith was presented with the following option information and was told that all the options are European and written on the same stock (whose current price is $75) with the same time to maturity, and no dividends are expected within the maturity of the options.

Option

Type

Option Price

Exercise Price

1

Call

$9.305

$78

2

Call

$12.150

$72

3

Put

$6.885

$78

4

Put

$4.375

$72

Isabelle was given 10 minutes to determine whether there is any arbitrage opportunity. If no, why? If yes, how much is the arbitrage and how to take advantage of it? Please complete the question as if you were Isabelle.

Reference no: EM133074218

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