1.A stock trades at $20. Its annual volatility is 18%. The risk-free rate is 3%. Calculate the price of a European call option and put option with strike K = 20 and T equal to 4 months.

2. Calculate the of a portfolio consisting of 2 long calls and 1 short put from the previous problem. How many shares of the stock would you short in order to build a new portfolio that is delta-neutral?

3.If the stock moves down 15 cents, what is the exact change in price of the delta-neutral portfolio from the previous problem?