2.[15 points) A put option gives its owner the right to sell a stock for a fixed price. Let pe be the price of a European put option with strike K, maturity T, and underlying stock S that pays a cash dividend d at time 0 Ke T +de (Ts) - S(0). (c) (3pts) For d = $5, K = $50, r = 3%, s = three months, T = four months, and S(0) = $40 compute the range of the put price. (d) (3pts) Explain how the bounds suggest that d > S(0) (Ts) is impossible. (e) (3pts) Without using options explain why d > S(0)e(Ts) is impossible. 3.[6 points) Let C4(K) be the NA-price of an American call option at time 0 with strike price K, underlying asset S, and maturity T. Consider two strike prices 0 0? 2.[15 points) A put option gives its owner the right to sell a stock for a fixed price. Let pe be the price of a European put option with strike K, maturity T, and underlying stock S that pays a cash dividend d at time 0 Ke T +de (Ts) - S(0). (c) (3pts) For d = $5, K = $50, r = 3%, s = three months, T = four months, and S(0) = $40 compute the range of the put price. (d) (3pts) Explain how the bounds suggest that d > S(0) (Ts) is impossible. (e) (3pts) Without using options explain why d > S(0)e(Ts) is impossible. 3.[6 points) Let C4(K) be the NA-price of an American call option at time 0 with strike price K, underlying asset S, and maturity T. Consider two strike prices 0 0