QUESTION 4. a. Consider two "corresponding" options, consisting of a call and a put with the exact same parameter values

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QUESTION 4.
a. Consider two "corresponding" options, consisting of
a call and a put with the exact same parameter values. For this
pair, the call premium is $8.5. If the current price of
the underlying asset is $85 and the present value of the
exercise price is $85, what is the premium of the put
option, P? Write the answer with one decimal;
e.g., 3.2. Do NOT use the $ symbol in your
answer; just write a numerical value.
b. Consider two "corresponding"
options, consisting of a call and a put with the exact same
parameter values. For this pair, the current price of the
underlying asset is $82, the options have
an exercise price of $86 and
they expire in 10 months. Additionally, the
risk-free rate is 5% p.a. What is the difference between
the premium of the put option, P, and the premium of the call
option, C; that is, what is the value of P - C? Write the
answer with two decimals; e.g., 3.24. Do NOT use the
$ symbol in your answer; just write a numerical
value. Of course, include the negative sign if the answer is
negative; but do not include the positive sign if the answer
is positive. NOTE: Use the continuous time version of the
Put-Call Parity equation (i.e., do NOT use the book's
version).