Assume you are on January 1, 2021 now, about one month before the GameStop (GME) short-squeeze event. You are a video game fan and noticed the discussions on public game forums that one of the largest video game retailer, GME, is in financial distress. You realized it may not only be a good opportunity for discounted video games, but also a good investment opportunity since you have studied derivatives. You conducted some research on GME and summarized the following market information: GME reported poor earnings in its financial reports over the past two years. Many analysts published negative recommendations on GME. The GME stocks have been heavily shorted. Up to the end of 2020, almost all the shares available for borrow were sold short. The short-sellers include some famous hedge funds. The lending fee for short-selling is 40% p.a. now, making it very difficult to create new short positions. However, you have also noticed a large number of discussions on social platforms from the users who are both video game players and experienced individual investors. With the anger of their favorite game retailer being heavily shorted by the Wall Street bankers, these users vow to act together to push up the stock price of GME and squeeze out the short-sellers. Although these actions were dismissed as "mobs" by the hedge funds, you consider them very seriously in your investment decision. You have also collected the information of the financial securities on GME as follows . The current GME stock price is $40. GME does not pay dividend. There are six European options traded on GME. Prices quoted below, all of them will expire in one month: Option name Strike price ($) Option price ($) Call A 20 25 Call B 40 3 Callc 60 1 Put A 20 1 Put B 40 3 Put C 60 25 Answer the following 7 sub-questions related to the GME's case. (a)None of the information you have collected on GME is material non-public information. Is this statement correct or wrong? (b)You strongly believe that a further price drop in the GME stock is unstoppable, but the stock price is unlikely to drop below $20. Meanwhile, you want to limit your possible loss if the individual investors squeeze out the short sellers even if it is very unlikely. Use the above put options A and B to design an option trading strategy that best fit your investment needs, and show the initial investment of this strategy and the payoff if the stock price drops to $25 one month later. (C)You strongly believe that the GME stock is going to be extremely volatile in the next month, because the fight between the short sellers and the investors who go long in GME stocks is going to be intensive, and the failure of any side will be catastrophic, but you don't know which side will win. Use two (one call and one put) of the available options with same strike price that requires the lowest initial investment to design an option trading strategy that best fit your investment needs, and show the initial investment of this strategy and the payoff if the stock price rises to $200 one month later