An investor has access to the following three securities: (i) a put option on stock XYZ with a strike price of $50, (ii) a call option on stock XYZ with a strike price of $50, and (iii) the stock XYZ itself. Both options expires in six months. Stock XYZ is currently trading at $50, the put option is currently trading at $1, and the call option is currently trading at $4. Assume that all securities are fairly priced and there are no arbitrage opportunities in the market.

A.Based on the market prices of all given securities, do you think the price of stock XYZ is more likely to increase or decrease in the future? Why? explain briey (4 lines)

B.How are the call and put option prices likely to change in the future if the price of XYZ increases to $80 in the next three months? explain briey (4 lines)