The current price of a share is $ 40. It is expected to increase or decrease by 10% in each of the following 2 quarters. The risk-free rate is 4% per annum with continuous compound interest. a) What is the price of a six-month European optopn at strike price of $ 38? b) An investor sells 2 securities of the above European put option, each of which has 100 securities. If the stock is finally up and down - what actions should the investor take at each node to offset the risk of his position? c) Find the current profit / loss of the above risk hedging procedure and interpret your effect.