= Solution
The <European call option> pays one in the state $S_1=5$ and zero in the other two states. Short one call, buy one third of a stock, and borrow one half unit of cash. Writing the option quote as $c=1/2$, the holdings and initial value are
$$
\boxed{(h_B,h_S,h_C)=(-1/2,1/3,-1),\qquad V_0=-1/2+1-c=0.}
$$
The terminal value is $-1/2+S_1/3-(S_1-4)^+$. At stock prices $5,3,2$ it is respectively
$$
\boxed{(1/6,\ 1/2,\ 1/6).}
$$
It is strictly positive in every state, so this <portfolio> is an <arbitrage>.
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