For the following questions, suppose the interest rate is 2.25%, the price of the underlying is $104.50, and we are considering the value of options that mature in 6 months.

If a call option with strike price $105 has a price of $8.42, what is the price of a put option with strike price $105?

1. $7.76
2. $9.14
3. $8.23
4. $8.10

If a put option with a strike price of $100 has a price of $2.76, what is the price of a call option with the same strike price?

1. $4.60
2. $7.36
3. $8.36
4. $12.86

Suppose that we observe the prices of a call and a put option with strike price = $108. Today, the price of the call is $1.86 and the price of the put is $4.17. Tomorrow, we observe that the price of the call has risen to $1.94 but the price of the put has remained unchanged. Which of the following could be correct, given this observation?

1. The price of the underlying asset rose to $104.58 but this would also suggest that the volatility of the underlying asset has fallen.
2. This observation is possible if the interest rate rose to 2.40%.
3. There is now an arbitrage profit opportunity. The way to exploit it is to sell the call option, buy the put option, buy the underlying asset, and borrow the difference (so that this strategy requires 0 initial capital outlay).
4. All of the above
5. Both B and C, but not A