Question: 2) Let S = $40, K = $35, r = 5% (continuously compounded), T = 1, and d = 0. Let u = 1.2, d

2) Let S = $40, K = $35, r = 5% (continuously compounded), T = 1, and d = 0. Let u = 1.2, d = 0.7, and n = 1. Calculate the value of a European call if D = 0.650000 and B = 17.3124.

Use: Table 1: Table of the Standard Normal Cumulative Distribution Function ?(z): https://math.ucalgary.ca/files/math/normal_cdf.pdf

a. $10.251

b. $8.688

c. $11.033

d. $9.817

e. $10.165

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