1. A stock price is currently $40. Over each of the next 3-month periods it is expected to go up by 10% or down by 10%. The risk-free rate is 12% per annum with continuous compounding. A) What is the value of a 6-month European put option with a strike price of $42? What would be the extra value of an American put option with same strike price? B) You are considering buying a "Lookback put" which allows you to sell the stock in 6-months at the highest observed price up until then. What is the value of this option? 1. A stock price is currently $40. Over each of the next 3-month periods it is expected to go up by 10% or down by 10%. The risk-free rate is 12% per annum with continuous compounding. A) What is the value of a 6-month European put option with a strike price of $42? What would be the extra value of an American put option with same strike price? B) You are considering buying a "Lookback put" which allows you to sell the stock in 6-months at the highest observed price up until then. What is the value of this option