Problem 1.2. (12.5) pl Do following problems 1. Consider an European call option with strike price 60, time to maturity is month, currently selling for $6.00. Also assume that S(O) = 60 and dividend of $0.75 in 2 months. Risk free rate is 8% (a) (pt)Using put call parity, calculate the price of European put option on same stock with strike price 60, time to maturity is 4 month. (W) (3 pt)Suppose you observe put price as $5. Explain how you exploit the arbitrage opportunity in detail. 2. The current stock price is $1000 with following details about European option contracts. Strike Price Call Premium Pul Premium 950 120.41 51.78 1000 93.81 74.20 1050 71.80 101.91 (a) (3 pt)Suppose you create(long position) a bull call option strategy using 950-call and 1050-call options. Calculate the option puryoff, marimum loss and maximum profit of this strategy (O) (4.5 pt)Suppose you buy 5 call options with strike 950, sell 10 call options urith strike 1000 and buy 5 call options with strike 1050. Calculate the cost of setting up this strategy. Then graph payoff and profit functions. What is the name of this strategy