1. Mary wants to retire in 38 years with $1 million in her retirement account. To that end she decides to save money every year in a savings plan that pays 11.6 percent annually. Her first contribution will occur at the end of the year (one year from today). She needs to save $__________ each year to the savings plan. Round it to two decimal places
2. A stock price is $10 now. In 1 month it can go to up 10% or down 10%. The annual interest rate is 5% with continuous compounding. Using risk-free portfolios, determine the value of the one-month European put with a strike price 10 and European call with strike price 9.5.