Apple's stock is currently trading for $4.59. There are puts and calls traded on APPLE.

In particular, you know that a call option with a strike of $4.25 which matures one year from

today is trading in the market for $0.85. The risk-free rate is 5% (in annual terms).

(a) What should the put trade at if there are no arbitrage opportunities?

(b) If the put was trading at $0.20, how could you construct an arbitrage strategy? Assume

you can take long or short positions at the given prices, as well as lend or borrow at the

risk-free rate.

(c) If the put was trading at $0.40, how could you construct an arbitrage strategy?