Let S(T ) be the price of a nondividend-paying stock at time T > 0. The stock's volatility is 20%, and the continuously compounded risk-free interest rate is 4%. You are interested in contingent claims with payoff being the stock price raised to some power. Consider the equation FP (S(T)x) = S(0)x where the left-hand side is the price at time 0 of a 0,T contingent claim (i.e. option) that pays S(T)x at time T. A solution for the equation is x = 1. Determine another x that solves the equation.

Let SCI") be the price of a nondividend-paying stock at time T :5 0. The stock's volatility is 20%, and the continuoust compounded risk-free interest rate is 4%. You are interested in contingent claims with payoff being the stock price raised to some power. Consider the equation FET(S(T)3) = 3(0)3 where the left-hand side is the price at time 0 of a contingent claim (i.e. option) that pays SCI")1 at time T. A solution for the equation is :r = 1. Determine another or that solves the equation