12. What is the value of a claim paying Q(T )

−1S(T )?

For the following four problems, assume that S follows equation (5) andQfollows equation (35). Suppose S0 = $50, Q0 = $90, T = 2, r = 0.06, δ = 0.02, δQ = 0.01, σ = 0.3, σQ = 0.5, and ρ =−0.2. Use Proposition 1 to find solutions to the problems. Optional: For each problem, verify the solution using Monte Carlo.