Question: Consider the Black Scholes model with parameters ro, T and S(0), and consider the European option with payoff function (-)-{ otherwise (a) Why are the

Consider the Black Scholes model with parameters ro, T and S(0), and consider the European option with payoff function (-)-{ otherwise (a) Why are the parameters r, o, S(0), T enough to price in the Black Scholes model? What is with for the bond price B(0)? (b) Find the price F of the European option. Follow the same steps as for the call option and notice that (e")2 = c2a, Consider the Black Scholes model with parameters ro, T and S(0), and consider the European option with payoff function (-)-{ otherwise (a) Why are the parameters r, o, S(0), T enough to price in the Black Scholes model? What is with for the bond price B(0)? (b) Find the price F of the European option. Follow the same steps as for the call option and notice that (e")2 = c2a

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