2. Stocks, Bonds and Options. (a) Suppose two stocks, A and B are well modeled by the following stochastic differential equations: Determine which stock appears to be a better investment, and justify your reasoning using the parameters in the stochastic differential equations. bond will achieve an effective yield of 10%. Describe this bond as one of pre- mium/par/discount. (b) Find the price of a 10 year, $100 bond with annual 5% coupons assuming the 2. Stocks, Bonds and Options. (a) Suppose two stocks, A and B are well modeled by the following stochastic differential equations: Determine which stock appears to be a better investment, and justify your reasoning using the parameters in the stochastic differential equations. bond will achieve an effective yield of 10%. Describe this bond as one of pre- mium/par/discount. (b) Find the price of a 10 year, $100 bond with annual 5% coupons assuming the