Corporate Bond Coupon Rate Maturity Convexity Number of Bonds I 4.5% 12 months 0.33 600 II 5.5% 18 months 0.43 1200 III 6.5% 24 months 0.53 1800 IV 7.0% 6 months 0.63 2400 Maturity Coupon Rate Yield 6 months 0% 1.00% 12 months 0% 1.50% 18 months 1.5% 2.00% 24 months 2.0% 2.5% (5 marks) (5 marks) (5 marks) Question 5 Answer the following questions on option pricing. Assume that the current price of a stock is $95, the risk-free rate is 3%, the up and down factors are 1.50 and 0.67 respectively. (a) Compute the price of an ATM European put option that matures in 1 year by using a 3-step binomial model. (5 marks) (b) Compute the price of an ATM American call option that matures in 1 year by using a 3-step binomial model. (5 marks) (c) Compute the price of an ATM Asian put option that matures in 1 year by using a 3- step binomial model. (5 marks) (d) Compare and contrast the price that is calculated in (a) with the price that is calculated with the Black-Scholes model. Show your workings clearly with calculations performed with Python.