= The following investment opportunities in Apple stock (AAPL) are available: A call option to purchase the stock at a price of 130$ in one month (h1(S1) max{0, S1 - 130}), at a cost of 3 dollars. A call option to purchase the stock at a price of 140$ in one month (h2(Si) max{0, S1 140}), at a cost of 1 dollar. You want to price the call order to purchase the stock in one month at a price of 135: h3(S1) = max{0, S1 135}. (a) Find all convex combinations of h1 and h2 that dominate h3. Considering only those two alternatives, what is the maximum price for the new call option to satisfy the no-arbitrage condition. (b) Find all convex combinations of h and h2 that are dominated by hz. What does this say about the minimum price for the new call option. (c) Given that the current market price of AAPL is 123$ and the monthly returns of AAPL for the last 5 months were 0.93, 1.11, 1.10, 1.00, and 0.93, what is the expected return and mean absolute deviation (MAD) of the new call option (h3(S1) = max{0, S1 - 135}) in one month. = The following investment opportunities in Apple stock (AAPL) are available: A call option to purchase the stock at a price of 130$ in one month (h1(S1) max{0, S1 - 130}), at a cost of 3 dollars. A call option to purchase the stock at a price of 140$ in one month (h2(Si) max{0, S1 140}), at a cost of 1 dollar. You want to price the call order to purchase the stock in one month at a price of 135: h3(S1) = max{0, S1 135}. (a) Find all convex combinations of h1 and h2 that dominate h3. Considering only those two alternatives, what is the maximum price for the new call option to satisfy the no-arbitrage condition. (b) Find all convex combinations of h and h2 that are dominated by hz. What does this say about the minimum price for the new call option. (c) Given that the current market price of AAPL is 123$ and the monthly returns of AAPL for the last 5 months were 0.93, 1.11, 1.10, 1.00, and 0.93, what is the expected return and mean absolute deviation (MAD) of the new call option (h3(S1) = max{0, S1 - 135}) in one month