A financial institution offers a new over-the-counter option that pays 150 percent of the payoff of a

Question:

A financial institution offers a new over-the-counter option that pays 150 percent of the payoff of a standard European option. Demonstrate, using Black-Scholes-Merton-Binomial lOe. xlsm (or by hand), that the value of this option is simply 1.5 times the value of an ordinary option. Let the stock price be $82, the exercise price be $80, the risk-free rate (continuously compounded) be 4 percent, the volatility be 40 percent, and the option expire in one year?