Problem 1.4. Answer all questions: 1. Suppose So = 40,8 = 0.02. K = 42, r = 0.04, Now consider European call and put options written on same stock with same time to maturity. Assume call option price is $2 and put option price is $2.34. What is the time to maturity 2. Suppose current stock price is $1650, a forward contract which expire in three month on same stock is price at $1670, risk free rate r = 0.06 and European call option with strike price $1650, and three month to expiry on same stock is $78. What is the value of three month European straddle on same stock