4 (18 marks) Question 4 comprises two parts. Students are to answer ALL parts of the question. a) You have been examining arbitrage opportunities with options. You have just found the following information regarding European options written on Commonwealth Bank of Australia shares. Using this information, discuss whether put-call parity holds in this instance? If it doesn't, indicate what strategy you would implement on taking advantage of any arbitrage opportunity and the profit you would earn from your strategy (Note: You are required to provide a table outlining the initial and terminal values of your strategy). (9 marks) A 20-month European call option contract on Commonwealth Bank of Australia shares with a strike price of $90 is priced at $6.50. A 20-month European put option contract on Commonwealth Bank of Australia shares with a strike price of $90 is priced at $0.25. The risk-free rate of interest is 5.55% p.a. b) After your excellent work on in part a) above, a