As an option trader, you are constantly looking for opportunities to make an arbitrage transaction. Suppose you observe the following prices for options on ABCD co stock: $3.18 for a call with an exercise price of $60, and $3.38 for a put with an exercise price of $60. Both options expire in exactly six months, and the price of a six month T-Bill is $97(for face value of $100).

A) using the put-call-spot parity condition, demonstrate graphically how you could synthetically recreate the payoff structure of a share of ABCD stock in six months using a combination of puts, calls, and T-Bills transacted today.

B) Given the current market prices for the two otions and the T-bill, calculate the no-arbitrage price of a share of ABCD stock.

C) If the actual market price of ABCD stock is $60, demonstrate the arbitrage transaction you could create to take advantage of the discrepancy. Be specific as to the positions you would need to take in each security and the dollar amount of your profit.