PROBLEM 2 Above is a table of observed put prices for 3-month options on stock XYZ. Current price of the stock is $40. The interest rate r=5%. For each observed put price the Black-Scholes model is used to extract the implied volatility and the delta. [A] Explain how we obtain the implied distribution from this table of option prices across strikes. Recall that this means the density function for S(T) that is consistent with the collection of put prices. Call this density function (pdf) q(x). [B] Suppose all you were told was that the market will charge you $2.278 for the \$40-strike put. That option delivers a payoff if and only if the stock finishes below its starting price of $40. Just from the price of $2.278 could you extract the market's implied probability of that occurrence? [C] How about question [B] assuming that you had all of the put prices