-Consider a family of European call options on a non-dividend-paying stock, each option being identical except for its strike price. The value of the call with strike price K is denoted by C(K). (Please use arbitrage arguments to explain why the following is true.)

-(a). If K₂ > K₁, then C(K₁) C(K₂).

-(b). If K₂ > K₁, then K₂ K₁ C(K₁) C(K₂) .

-(c). Consider three options with strike price K₃ > K₂ > K₁, where K₃ K₂ = K₂ K₁. Then C(K₂) (C(K₁) + C(K₃))/2.