The assets of Ninza Corp. are worth of 100MM today, issued 1MM of shares worth of $100 each. You assume that in one year the assets of the company will be 110MM or 90MM. Also, a riskless zero-coupon bond maturing in one year and its offering a yield of 5% today. The firm has issued a zero-coupon bond that matures in one year and has a face value of 100MM.

1) While holding the positions you confident that price of the stock would rather rise to $110 than fall to $90 and decide to make extra cash for the company. You decide to sell the Put Options. What is the price of the put option?

2) While holding the positions you confident that price of the stock would rather fall to $90 per share than rise to $110 and decide to make extra cash for the company. You decide to purchase Call for these share. What should the price of the Call option be?

3) What is the best strategy for the company?