3)Use payoff tables (future cash flows) to prove the following pricing rules (all options are European, are on the same underlying asset, have the same expiry date and there are NO dividend payments involved):

a) Maximum difference

Call options:C(X1) - C(X₂) PV(X₂- X₁), where X₂> X₁

Put options:P(X₂) - P(X₁) PV(X₂- X₁), where X₂> X₁

b) Put-Call Parity(NOTE: the options have the same strike price)

C + PV(X)= P + S₀

c) Maximum value of a put option

P PV(X)