3. (10p) Let CE, PE, CA, and PA denote prices of a European call option, a European put option, an American call option and an American put option, respectively. All of them with expiry time T and the same strike price K. Let r> 0 be the continuously compounded interest rate. Show that: a) If CE PE - S(0)+ Ke--T 0, then you can make a sure risk-less profit. -T 3. (10p) Let CE, PE, CA, and PA denote prices of a European call option, a European put option, an American call option and an American put option, respectively. All of them with expiry time T and the same strike price K. Let r> 0 be the continuously compounded interest rate. Show that: a) If CE PE - S(0)+ Ke--T 0, then you can make a sure risk-less profit. -T