QUESTION 1 Consider the following options on JWK Corp stock Option JWK-AC JWK-EC JWK-AP JWK-EP Type Call Call Put Put Exercise style American European American European Strike 102 102 102 Maturity (yrs) 2 2 2 2 102 Assume the current price for JWK Corp stock is $100, the volatility of the stock price is 20% per annum, the risk-free interest rate is 2% per annum, no dividends will be paid on JWK Corp stock over the next two years and the underlying of each option is on JWK Corp share. a) Use a two-period binomial model to value the European put. b) Use a two-period binomial model to value the American put. c) What do your answers in parts (a) and (b) tell us about an American put compared to an otherwise equivalent European put? d) Use a two-period binomial model to value the European call. e) Use your answer in part (d) to value the American call. f) Use your answer in part (a) and put-call parity to value the European call. Compare your answer to part (d) and comment