Consider a two-period model with random interest rate. The stock prices are so = 4, S1 (H) = 8, S1 (T) = 2, S2 (HH) = 12, S2 (HT) = 8, S2 (TH) = 8, and S2 (TT) = 2, where So is the stock price at time 0, S1 (H) is the stock price at time 1 when the market is up (with a head), S (T) is the stock price at time 1 when the market is down (with a tail), S2 (HH) is the stock price at period 2 when the market is up from period 1 (where the market up). S2 (HT), S2(TH), and S2 (TT) are defined similarly. The interest rates are ro = 1; r (H) = 1, and r (T) = 1. Let C2 = (S2 7), P2 = (7 S2), where On is the price of European call option, Pn is the price of European put option and Fn is the price of forward contract, n = 0,1,2. Let Bn.m be the bond price at time n and maturing at time m, such that B2.2 = 1. 1. Compute Cn, En, and Pn, n= 0,1,2. Verify Cn = Fn + Pre- 2. Compute Bo.2 and B1,2- 3. Let Forn,n be the forward price of this stock) at time n and (a forward contract will be) maturing at time m. Compute Foro.2 and For 1,2