Question: (5 points) Using the Black/Scholes Option Pricing Model, calculate the value of the call option S=85;X=95;T=6 months; =.6;Rf=10% - (1 pt) What is the maximum

(5 points) Using the Black/Scholes Option Pricing Model, calculate the value

(5 points) Using the Black/Scholes Option Pricing Model, calculate the value of the call option S=85;X=95;T=6 months; =.6;Rf=10% - (1 pt) What is the maximum value that a call can take? Why? (8) (1 pt) What is the minimum value that a call can take? Why? 8 (1 pt) What increase in price does the stock have to achieve in order to break-even? 9(1pt) What is the time value of the call option? (10) (1 pt) If you buy a bottom-straddle what strategy are you trying to use? (5 points) Using the Black/Scholes Option Pricing Model, calculate the value of the call option S=85;X=95;T=6 months; =.6;Rf=10% - (1 pt) What is the maximum value that a call can take? Why? (8) (1 pt) What is the minimum value that a call can take? Why? 8 (1 pt) What increase in price does the stock have to achieve in order to break-even? 9(1pt) What is the time value of the call option? (10) (1 pt) If you buy a bottom-straddle what strategy are you trying to use

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