1. (a) A vanilla European call option maturing in two years is $8 higher than its corresponding put option. The underlying stock pays no dividend and both options are at-the-money. The annual effective interest rate is 10%. Deter- mine the price of the underlying stock. (10 marks (b) A bond maturing in 14 months is selling for $50.4. Its face value is $50, and its annual coupon rate is 10% and coupons are paid semi-annually. Determine the bond yield. All the rates are compounded continuously, [10 marks) (C) Suppose the price of the t-year zero coupon bound with par value 1 is e-2-4 for t > 0. Determine the forward rate for the period (1,2). [10 marks) (d) One client borrows $10000 at the annual rate 12% with monthly compounding for one year. The loan will be repaid with the same amount at the end of each month. Determine the monthly repayment. (10 marks