Question: Exercise 1 (10 points All your answers must include detailed computations. Please use the provided Cumulative Normal Distribution table for numerical applications involving the Black

Exercise 1 (10 points All your answers must include detailed computations. Please use the provided Cumulative Normal Distribution table for numerical applications involving the Black & Scholes formulas Question 1 14 points Give the Black & Scholes formula for a European call on a stock that pays a continuous dividend rate Question 2 (6 points! A stock S is priced at $100, has a volatility o = 30% and pays a dividend rate q = 398 The risk free rate is r = 8% Compute in the Black & Scholes framework the price of a call on S with strike K = 95 and maturity 9 months Exercise 1 (10 points All your answers must include detailed computations. Please use the provided Cumulative Normal Distribution table for numerical applications involving the Black & Scholes formulas Question 1 14 points Give the Black & Scholes formula for a European call on a stock that pays a continuous dividend rate Question 2 (6 points! A stock S is priced at $100, has a volatility o = 30% and pays a dividend rate q = 398 The risk free rate is r = 8% Compute in the Black & Scholes framework the price of a call on S with strike K = 95 and maturity 9 months

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