1. Explain put-call parity for European options and relate put-call parity to arbitrage and the construction of synthetic options.
2. Suppose that the current stock price is $52, and the risk-free rate is 6%. You have found a quote for a 3-month call option with an exercise price of $ 50. The call price is $ 4.11, but due to light trading in the put options, there was not a listed quote for the 3-month, $ 50 put. Estimate the price of the 3-month put option using put-call parity theorem.