Question #5 (10 marks) Q5-Part I (6 marks) American call option American put option Time to maturity te Volatility to Dividendste (1) If time to maturity increases, what happens to the prices of American call and put options respectively? Putincrease, decrease, orno change" in the corresponding cells in the above table, and explain your answers. (2 marks) (2) If volatility increases, what happens to the prices of American call and put options respectively? Put increase, decrease, orno change in the corresponding cells in the above table, and explain your answers. (2 marks) (3) If dividends increase, what happens to the prices of American call and put options respectively? Put increase, decrease, orno change in the corresponding cells in the above table, and explain your answers. (2 marks) > Q5-Part II (4 marks) (1) The upper bound for American put option price is P SK. Discuss the arbitrage opportunity if P > K. (2 marks) (2) The upper bound for European put option price is p Ke-r7