Q.1) An option has a strike price of USD 50. A cash dividend of USD 0.50 is announced with an ex-dividend date before the end of the life of the option. What effect does this have on the strike price? Q.2) Under what circumstances does a European call on an asset equal the price of a European put on the asset when both have the same strike price and time to maturity? Express your answer in terms of forwarding prices.