Question: Let S = $120, K = $100, = 30%, r = 0, and = 0.08. a. Compute the Black-Scholes call price for 1

Let S = $120, K = $100, σ = 30%, r = 0, and δ = 0.08.
a. Compute the Black-Scholes call price for 1 year to and for a variety of very long times to What happens to the price as T →∞?
b. Set r = 0.001. Repeat (a). Now what happens? What accounts for the difference?

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