price. What is the value of you at that time is $114 per barrel? Assume th 17. Microsoft shares are currently trading at $100. TE struck at K = 80, is $30. The continuously-com (a) How much should a two-year put on Micros (b) Carefully explain how you could exploit a trading at $4. Be sure to demonstrate wha today and (ii) at maturity. 3. Consider a portfolio cauriti if the price of oi ? Assume that storage costs are as in (b). g at $100. The price of a two-year call option on Microsoft, uously-compounded risk-free rate of interest is 5%. t on Microsoft, struck at K = 80, cost? exploit a two-year put, struck at K 80, that was strate what the corresponding cash flows would be (i) g position in one call option struck at $100, a short 110 and a long position in one at maturitu price. What is the value of you at that time is $114 per barrel? Assume th 17. Microsoft shares are currently trading at $100. TE struck at K = 80, is $30. The continuously-com (a) How much should a two-year put on Micros (b) Carefully explain how you could exploit a trading at $4. Be sure to demonstrate wha today and (ii) at maturity. 3. Consider a portfolio cauriti if the price of oi ? Assume that storage costs are as in (b). g at $100. The price of a two-year call option on Microsoft, uously-compounded risk-free rate of interest is 5%. t on Microsoft, struck at K = 80, cost? exploit a two-year put, struck at K 80, that was strate what the corresponding cash flows would be (i) g position in one call option struck at $100, a short 110 and a long position in one at maturitu