**Please answer only the question below.**

1. Dynamic Energy Systems is currently trading for $50 per share. The stock pays no dividends. A one-year European put option on Dynamic stock with a strike price of $41 is currently trading for $12.47. You currently hold 10 puts and borrowed $390.48. Assume the risk-free interest rate is 5% per year. a. How you would hedge your position and what will be the cash flow when you hedge? b. Demonstrate that the hedge works if the stock price is $70 at the end of the year.

Dynamic Energy Systems stock is currently trading for $45 per share. The stock pays no dividends. A one-year European put option on Dynamic with a strike price of $57 is currently trading for $12.60. If the risk-free interest rate is 5.5% per year, what is the price of a one-year European call option on Dynamic with a strike price of $57? Dynamic Energy Systems stock is currently trading for $45 per share. The stock pays no dividends. A one-year European put option on Dynamic with a strike price of $57 is currently trading for $12.60. If the risk-free interest rate is 5.5% per year, what is the price of a one-year European call option on Dynamic with a strike price of $57