1. If the stock trades for $130, and the expiring put with an exercise price of $145 trades for $18, how would you trade?

2. What is the gamma of a share of stock if the stock price is $55, and a $50 call on the stock is priced at $7 while a $50 put is priced at $4? Explain.

3. Explain why covered interest arbitrage is just like our familiar cash-and-carry transactions

Additional Requirements Level of Detail: Step-by-step Explanation