Problem 3. Consider the Black-Scholes option pricing framework. (1) (4 points) According to Black-Scholes, which is more valuable: a European call option that is 10% out-of-the-money, or a European put option that is 10% out-of- the-money? (2) (4 points) We have discussed Delta-Gamma hedging and shown how to implement it. Why do we expect Delta-Gamma hedging to perform better than ordinary Delta hedging? (2) (2 points) What do you see as the most important practical problems in imple- menting Delta-Gamma hedging in a real trading situation?