Calculaw we provavinty that we put will be vacivistu. Styles b. Calculate the expected value of the stock's price contingent on it exceeding the exercise price of the put. c. Calculate the conditional expected value of the put contingent on it being exercised. d. Calculate the expected time T value of the put. e. If time T = 2 and r = 0.01 what is the current value of the put? 7. (15 points total). Consider a one-time, two potential outcome framework where there exists Company Q stock cun . selling for $55 per share and a riskless $100 face value T-bill currently selling for $80. Suppose Company Q faces uncertainty, in that it will pay its owner either $30 or $75 in 1 year. Further assume that the physical probability that the stock will drop is 0.2. a. List the risk-neutral probabilities for this payoff space. b. Compute values for the Radon-Nikodym derivative for this change of measure. c. Value call and put options on this stock, with exercise prices equal to X = 60. d. Does put-call parity hold for this example? 8. (15 points total). Suppose that So = 0.7 to purchase a security, with potential payoffs given as follows: S1 = 3, S2 = 1.5, and S3 = 0 such that under the physical probabilities, the expected value is Ep[S] = 0.85 and the variance equals Ep [S - E[S]]2 = 0.80. a. Find the physical probabilities in measure P. b. Find the risk-neutral probabilities in measure Q. Recall that under the risk-neutral value lie. it is