1) The common stock of a company XYZ is trading at a narrow range of around $100/share for months, and you believe it is going to stay in that range for the next 3 months. A three month at the money put option is selling for $4. a) If the risk free Interest rate is 10% a year, find the price of a three month call option at exercise price =$100 for company XYZ if the option is that at the money. b) What would be simple option strategy using puts and calls to exploit your conviction about the direction of the future stock movement of company XYZ? What is the most money you can make from this position? How far does the stock need to move in either direction before you to lose money? c) How can you create a position using a put, a call, and riskless lending that would have thew same payoff structure as the stock on expiration? What would be the net cost of this position today