Exercise: Arbitrage strategies

On July 1^st, you notice the following quotes in the options market (supposedly perfect otherwise), the underlying (spot) asset being the (not dividend-paying) FTSE 100 index:

Call 7,200 December: 377

Call 7,400 December: 278

Put 7,200 December: 276

Put 7,400 December: 384

The FTSE 100 index quotes 7,230 and the 6-month (annualized) interest rate in the money market is 2% (simple, or proportional, rate). You can take 6 months as 0,5 year.

1) What arbitrage involving these 4 options should you undertake?

2) Establish the price sequence of cash-flows (i.e. the cash flow at date 0 (July 1^st)) and the cash flow at date T (December 31^st) induced by this arbitrage if you do not cancel, by either lending or borrowing, the initial (at date 0) cash inflow or outflow.

3) What is the quarterly IRR (Internal Rate of Return) of this sequence? Check that it reflects an arbitrage