26. What is the fundamental difference between (i) the American call option and(ii) the European call option (4 points) 27. The following option prices were observed in the Listed Options Quotations section of the Wall Street Journal for Walt Disney on Tuesday February 27, 2003. Option NY Strike Calls-last Puts-last Mar. Apr May Close Price Mar Apr May Disney 121.375 121.375 121.375 121.375 115 120 125 130 7.75 9.875 14.875 1.125 2.8755.125 4.125 6.875 10.8752.504.75 7.375 2.125 4.375 8.25 5.506.8759.375 625 2.3755.509.259.75 11.125 The expiration in March is 21 days, in April 52 days and in May 112 days. The continuously compounded risk free rate is.0535. The standard deviation of returns is .28. The stock does not pay dividends. (15 points) a. Construct the payoff and profit diagram for a long position in the 120 April puts