Result IV.CALCULATIONS (20' X2=40') Reviewer 1. You would like to speculate on a rise in the price of a certain stock. The current stock price is $29, and a three-month call with a strike of $30 costs $2.90. You have $5,800 to invest. Identify two alternative strategies, one involving an investment in the stock and the other involving investment in the option. What are the potential gains and losses from each? 2. Suppose that zero interest rates with continuous compounding are as follows: Maturity (months) Rate(% per annum) 3 3.0 6 3.2 9 3.4 12 3.5 Calculate forward interest rates for the second, third, fourth quarters