Hey guys

Im looking for help. These 2 questions have really puzzled me. any help would be appreciated. Just these two. Question 2 is more important at the moment. The answer is already on this website but my paypal account wont go through, so please him and its due soon.

Question 1

Assume six-month forward price of XYZ stock is $58. The stock pays no dividends. The six-month continuously compounded rate of interest is 4%. If the price of a put option is $3 what will be the maximum possible exercise price X that is consistent within no arbitrage context?

Question 2 The current price of a non-dividend-paying stock is $40. Over the next year it is expected to rise to $42 or fall to $37. An investor buys put options with a strike price of $41. Explain the number of shares necessary and the condition required to hedge the position?