faber industries has a current stock price of $38 per share. a european-style call option with a strike price of $40 and four months until expiration is trading at $2.56. the risk-free rate is 6%. a. what is the no-arbitrage value of a european-style put on faber industries with a strike price of $40 and 4 months until expiration? (2 points) b. if a european-style put on faber industries with a strike price of $40 and 4 months until expiration is trading at $2.95, what trades are necessary to capture the available arbitrage profit? demonstrate that the trades constitute an arbitrage by showing a positive inflow with no possibility of a loss from the transactions.
