Consider the October 2015 IBM call and put options in the table Ignoring the negligible interest you might earn on T-Bills over the remaining few days' life of the options, show that there is no arbitrage opportunity using put-call parity for the options with a $140 strike price. See attachment for chart and questions.

Consider the October 2015 IBM call and put options in the table Ignoring the negligible interest you might earn on TBills over the remaining few days' life of the options, show that there is no arbitrage opportunity using putcall parity for the options with a $140 strike price. Specifically: a. What is your profit/loss if you buy a call and TBills, and sell IBM stock and a put option? (Select the best answer below) A. Sell call and TBills, buy stock and put = $9.50 + $140.00$148.72+$0.35=$17.87 B. Sell call and TBills, buy stock and put = +$9.15 + $140.00$149.04$0.36=$0.25 C. Sell call and TBills, buy stock and put = +$9.15 $140.00+149.04$0.36=$17.83 D. Sell call and TBills, buy stock and put = $9.50 $140.00+$148.72+$0.35=$0.43 b. What is your profit/loss if you buy IBM stock and a put option, and sell a call and TBills? (Select the best answer below) A. Sell call and TBills, buy stock and put = +$9.15 + $140.00$149.04$0.36=$0.25 B. Sell call and TBills, buy stock and put = $9.50 + $140.00$148.72+$0.35=$17.87 C. Sell call and TBills, buy stock and put = $9.50 $140.00+$148.72+$0.35=$0.43 D. Sell call and TBills, buy stock and put = +$9.15 $140.00+$149.09$0.36=$17.83 c. Explain why your answers to (a) and (b) are not both zero. (select the best choice) A. Both negative due to transactions costs: call spread ($0.32)+put spread ($0.01)+stock spread ($0.35)=$0.68 in total loss in (a) and (b). B. Both negative due to transactions costs: call spread ($0.35)+put spread ($0.32)+stock spread ($0.01)=$0.68 in total loss in (a) and (b). C. Both negative due to transactions costs: call spread ($0.01)+put spread ($0.35)+stock spread ($0.32)=$0.68 in total loss in (a) and (b). D. Both negative due to transactions costs: call spread ( $ 0.35) + put spread ($ 0.01) + stock spread ($ 0.32) = $0.68 in total loss in (a) and (b). d. Do the same calculation for the October options with a strike price of $150. What do you find? How can you explain this? Is the following statement true or false? "In this case, there appears to be a small profit if we buy the stock and the put, and sell the call and a risk free bond with a face value of $150: negative $ 2.47 minus $ 149.04 plus $ 1.53 plus $ 150 equals $ 0.02$2.47$149.04+$1.53+ $150=$0.02. Of course, most traders could not actually borrow at a 0% interest rate, and so would receive less than $150 for the bond, eliminating this profit. And even if this were possible, after executing a few trades prices would quickly move to eliminate this arbitrage."