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  3. part 1 indicate whether each of the following two statements...

Question: part 1 indicate whether each of the following two statements...

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Part 1.

Indicate whether each of the following two statements below is true, false or uncertain and justify your response.

(a)    It is theoretically impossible for an out-of-money European call and an in-the-money European put to be trading at the same price. Both options are written on the same non-dividend paying stock.

(b)   By simultaneously buying a call and short-selling the underlying asset, we can create a synthetic short position in the put.

Approx 50-100 word justification 

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