Explanation
Forward premium or discount can be easily calculated as {(Forward rate - Spot rate) / Spot rate x 365/number of days]. In this case, it can be calculated as =((1.1652 - 1.1763) / 1.1763 ) * 365/91 = 3.785%, which is a discount as it is a negative number. It can also be interpreted as a discount as the forward price is lower than the spot price.

Explanation
Contingent premium options are options where no premiums are due upfront, and are due only at expiry and only if the option finishes in the money. (If this sounds too good to be true, remember that at expiry it is possible that the premiums due exceed the payoffs from the option. So there is no free lunch.) For this reason they are also called pay-later options.
They are simple combinations of a vanilla option and the 'right' number of cash-or-nothing options. The buyer of a contingent premium option has effectively purchased a vanilla option and sold enough number of cash-or-nothing options so that the net premium due at inception is zero.
Therefore statement I, II and III are correct and Choice 'b' is the correct answer.

Explanation
Everything else remaining the same, an increase in the rate of dividends causes the value of call options to fall and the value of put options to rise. Therefore, Choice 'b' is the correct answer. (In the exam, the question could address either a call or a put option, so be aware of the answer in either case).
To understand this, consider how dividends are accounted for when valuing an option using the Black Scholes model. Future dividends are discounted to the present using the risk free rate and this discounted value is reduced from the spot price used in the BSM valuation. Effectively, this reduces the spot price used in the BSM formula. When the spot price reduces, and the exercise price remains the same, then the value of the call option goes down. In the same way, when spot price is reduced by the present value of dividends (and the exercise price stays the same), obviously the put option becomes more valuable. Therefore an increase in the rate of dividends increases the value of the put option.
There is another intuitive way to think about this: A call option is like a long position in the stock, but the holder of the call option is not entitled to receive dividends (unlike the holder of the stock). Since the holder of the call option has to forego the dividends, he is willing to pay less for the option; or in other words, the value of the call reduces.
In the same way, a put option is like having a short position in the stock. The holder of the short position has to borrow the stock in order to get into the short position in the first place. When dividends are paid, the holder of the short stock position has to make good any dividends that might be paid to the lender of the stock. The holder of a put option does not have to make any such payments. Therefore the put option is more valuable, and the existence of dividends (or an increase in dividends) increases the value of the put option.
(Try this out using the Black Scholes Excel model given under the tutorials by varying the spot price.)

Explanation
To answer this question, we need to look at the put-call parity, which can be expressed as:
Value of call - Value of put = Spot price - Exercise price discounted to the present or, Value of call - Value of put = Stock - Bond with a future value equal to exercise price Therefore, a long call and a short put is equivalent to a long stock position and a short bond.
Choice 'a' is therefore the correct answer. (Alternatively, we could also have constructed a graph of the payoff profiles to arrive at the same answer).

Explanation
The price of a treasury bill can be calculated as [Future value / (1 + yield x days-to-maturity/365)] =
100/(1+5%*90/365) = $98.78.