2. (20%) An investment bank is offering a new financial instrument called a "happy call" on HSBC with an exercise price of $55. Three months from now the contract expires and the holder has a choice between receiving half a share of HSBC for free and buying one share at the exercise price. The holder always gets something with the happy call. The current stock price of HSBC is $60. Two European call options on HSBC with exercise prices, $55 and $110, both of which expire three months from now, are trading at $7 and $2, respectively. The riskless rate of interest rate is 5% per year. What is the fair price of the happy call?I 2. (20%) An investment bank is offering a new financial instrument called a "happy call" on HSBC with an exercise price of $55. Three months from now the contract expires and the holder has a choice between receiving half a share of HSBC for free and buying one share at the exercise price. The holder always gets something with the happy call. The current stock price of HSBC is $60. Two European call options on HSBC with exercise prices, $55 and $110, both of which expire three months from now, are trading at $7 and $2, respectively. The riskless rate of interest rate is 5% per year. What is the fair price of the happy call?I