A stock price has an expected return of 16% and a volatility of 35%. The current price

Question:

A stock price has an of 16% and a volatility of 35%. The current price is $38.
a) What is the probability that a European call option on the stock with an exercise price of $40 and a date in six months will be exercised?
b) What is the probability that a European put option on the stock with the same exercise price and will be exercised? Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...