Question 1 The price of a stock price is currently $40. It is known that at the end of 6 months it will be either $48 or $36. The risk-free rate of interest with continuous compounding is 10% per annum. a) Calculate the value of a 6-month European call option on the stock with an exercise price of $42 using the no-arbitrage argument. b) Do it again but using the risk-neutral valuation principle. c) Calculate the value of a 6-month European put option with strike price of $38 using only the risk- neutral principle