Question 2: Assume that you buy a European call option contract (to buy 100 shares of ABC stock) that expires on June 30th, 2021. The strike (exercise) price is $12. The stock price reaches to $13.5 on the expiration day. (1+1 = 2 Points) 1) Would you exercise your call option? Please motivate your answer and show the profit loss of exercising the option. ii) Please briefly explain how derivative securities can be used for hedging purposes. Explain the Crowding-out effect? How can this be avoided