Exercise 3 (20 points Students are invited to use the cumulative normal distribution tables at the end of this document in order to solve the numerical questions. Question 1 (4 points) Give the Black & Scholes formula for a European call on a stock that pays a continuous dividend rate. Explain the name of all the variables in the formula. Question 2 (4 points] Using Put-Call Parity, deduce the Black & Scholes formula for a European put on a stock that pays a continuous dividend rate. Question 3 (6 points) A stock S is priced at $100, has a volatility o = 25% and pays a dividend rate q = 4%. The risk free rate is r = 7%. Compute in the Black & Scholes framework the price of a call on S with strike K = $100 and maturity 9 months. Question 4 [6 points) Compute the price of a put on the same stock S with strike K = $110 and maturity 9 months. The risk free rate is still r = 7%