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1-month call and put price for European options at strike 108are 0.29 and 1.70, respectively. The prevailing short-term interestrate is 2% per year.Find the current price of the stock using the put-callparity.Suppose another set of call and put options on the same stockat the strike price of 106.5 is selling for 0.71 and 0.23,respectively. Is there any arbitrage opportunity at 106.5 strikeprice? Answer this by finding the amount of arbitrage profitavailable at the strike price of 106.5. (Hint: Use the price foundin part (a) to find the value of both sides of the put-call parity.If the two sides are not equal, then there is some arbitrageopportunity.)What would be the strategy to take advantage of arbitrageopportunity at 106.5, if there is any? (Hint: State whether youwould have to be long/short in all the 4 instruments (put, call,stock, bond) that are used in the put-call parity)