Consider a model with two stocks. Let Stj denotes the price of one share of stock j, t-months from now. Consider a claim maturing 6 months from now. You are given:

(i) S01 = 45.

(ii) S02 = 50.

(iii) Stock 1 pays continuous dividends proportional to its price at a rate of 2.5%.

(iv) Stock 2 pays continuous dividends proportional to its price at a rate of 4%.

(v) The price of a European option to exchange Stock 1 for Stock 2 at time 3 is 7.

Calculate the price of the claim if:

(a) The payoff of the claim is max{S61,S62};

(b) the payoff of the claim is min{S61,S62}.