Question: a) The Black-Scholes valuation model shows that the option's value is a function of five variables. What are the five variables? Explain how the five

a)The Black-Scholes valuation model shows that the option's value is a function of five variables. What are the five variables? Explain how the five variables affect call premium.(5 marks)

b)Explain carefully the difference in the payoffs between writing a put option and buying a call option.(5 marks)

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