The premiums on 1-year, 100-strike, European call and put options on a stock index are $9.82 and $6.34 respectively. The spot price of the index is $98 and the risk free continuously compounded interest rate is 5%. (a) State the necessary conditions and assumptions required for the put-call parity to hold. (b) Validate that the law of no arbitrage is violated at the given price levels of the put and call. (c) Assuming that the call is the mispriced option, construct an arbitrage strategy explicitly showing the positions taken and the resulting cash flows. Use a cash flow table to illustrate the results