The following table lists prices of options on IBM stock.

Stock	Time to Exercise (months)	Exercise Price	Stock Price	Put Price	Call Price
IBM	1	120	126	2	8

a. Using the information above derive the implied monthly interest rate.

b. Draw the position and profit diagrams for the following positions:

i. Long position in a call.

ii. Short position in a call. i

ii. Long position in a put.

iv. Short position in a put.