(a) Assume that the risk-free interest rate is 3% (annual), and there is a stock with current value S(0) = 200. Is it possible to find an arbitrage opportunity if the forward price of stock is F = 203.50 with delivery date 1 year? If yes, explain how you would make a riskless profit.

(b) Assume again that the risk-free interest rate is 3% (annual), and there is a stock with current value S(0) = 200. Suppose that the price of a call option (for this stock) with exercise time T = 1 year is 10, and the price of a put option (for the same stock, same exercise time) is 8. The two options also have the same strike price. What is it?