ABC common stock trades at a market price of $100 There are traded European and American put and call options on ABC common stock with times to expiration of 1 year and exercise prices ranging trom 580 to $120 in steps of $10 The risk tree rate is 5% continuously compounded Consider the following statements Statement ! If the market price of a European put option on ABC common stock with an exercise price of S110 s lower than its lower bound a riskless arbitrage would involve buying the option short-selling the stock and investing $104 64 in the risk free asset Statement I Using the put-call party relationship, a long position in the risk free asset with a face value of $100 and a time to maturity of 1 year can be created by buying ABC common stock, buying a European put on the stock and writing a European call on the stock with exercise prices of S100 and times to expiration of 1 year Which of the following is correct? Select one O a statements and il are correct. b. Statement is correct, Statement is incorrect c. Statement is incorrect Statement il is correct. d Statements and il are incorrect 134 On March 25, 2021 the wheat futures contract traded on the CME Group with a delivery month in May 2021, has a futures price of 611 cents por bushel On the same date, the open futures position of long and short hodgers in the contract is 16,495 and 10,504 contracts, respectively According to Keynes and Hicks theory of the relationship between the futures and expocted future spot price, which of the following is correct? Select one a. The expected future spot price of wheat in May 2021 should be lower than 56 11 bushe O b. The expected future spot price of wheat in May 2021 should be higher than 56. 11 per bushel The expected future spot once of wheat in May 2021 should be equal to 56 11 per bushel Net