I need help with the questions:

Problem 3 Answer the following true/false questions. (a) Suppose that you have decided to create a bitcoin mining company. Your primary operating cost is electricity, so the price of electricity is a key risk for you. One way to hedge this risk would be to buy call options on electricity. (More practically, it would be call options on electricity futures. Here, consider the call to be on electricity itself.) Solution: (b) Because the price of a call is always less than the price of the underlying stock, buying calls is less risky strategy than buying stocks. Solution: (c) For a given stock and expiration, a call with a higher strike is more valuable than a cal with a lower strike. Solution: (d) Suppose that the riskfree rate is zero. In this case, putcall parity says that for any strike, the price of a European put is exactly equal to the price of a European call. Solution: (e) Because of the timevalue of money, American puts with shorter times to expiration are more valuable than American puts with longer times to expiration. Here, consider the same underlying stock and strike price. Solution: (f) When volatility is higher, people tend to discount cash ows more so option prices tend to go down: Solution