A stock is priced at 125.37, the continuously compounded risk-free rate is 4.4%, and the volatility is 21%. There are no dividends. a. Determine a fair price for a two-year asset-or-nothing option with exercise price of 120.

b. Assuming you purchased the asset-or-nothing option at the price determined in part a, calculate your profit if the asset price at expiration is 138 or 114.

c. Determine a fair price for a two-year cash-or-nothing option with exercise price of 120 that pays 120 if it expires in the money.

d. Assume you purchased the cash-or-nothing option at the price determined in part c, calculate your profit if the asset price at expiration is 138.