It is November 12^th, 2020 and you are looking at the screen reported below. On a different screen (not shown) you see that the S&P500 dividend yield is 1.80% (per annum, continuously compounded) and that the USD Libor is at 0.1403% (also per annum and continuously compounded)

Consider the 3575 December 4^th. Call and Put. from the screenshot below. Your friend Howard Wolowitz, a well-known guru in the options market, tells you that over the life of the two options, the S&P500 will pay a cumulative dividend with a present value (as of today, November 12^th.) of $9.0454

Please note: IV in the table represent the annualized implied volatility of the option.

In part a, b and c, please use the discrete dividend amount provided. In part e, please use the dividend yield provided.

For all answers, please show your work

1. What are the respective time values and intrinsic values of the two options you are considering?

2. Are they both trading within their arbitrage bounds?

Round to 2 decimal digits at each step.

3. Does put-call parity hold for those two options?

4. Ignoring transactions costs, do you see arbitrage opportunities involving those two options?

5. Price the 3575 December 4^th. call according to the BSM model (use calendar days).

6. How does the BSM price compare to the market price of the call?