1. Using the Black-Scholes model compute the value of a European call option on a non- dividend paying stock with an exercise price of $40 and an expiration date 6 months from now when the stock price is $35, the volatility is 10% and the annual risk free rate is 4%. Re-compute the call price using the binomial model. Divide the time to expiration into 8 periods. How do the prices compare? 1. Using the Black-Scholes model compute the value of a European call option on a non- dividend paying stock with an exercise price of $40 and an expiration date 6 months from now when the stock price is $35, the volatility is 10% and the annual risk free rate is 4%. Re-compute the call price using the binomial model. Divide the time to expiration into 8 periods. How do the prices compare