Suppose that stock A is currently selling at $105. A call option on stock A expiring after 3 years is selling for $8 with exercise price $120. A put option on stock A with same exercise price and expiration date is selling for $13. The risk-free rate is 6% in the following years.

(a) Construct the payoff table for protective put strategy.

(b) Does the put-call parity hold? Explain. If not, construct a arbitrage investing portfolio.

(c) Suppose that put-call parity has to hold, what should the risk-free rate be?