please answer both and show work.

What was the profitability of buying the put? Assume that an investor has $10,000 to invest. Stock can be purchased at $20 per share (500 shares can be purchased). Call options to purchase 100 shares at a price of $25 can be purchased for $500 (options to produce 2,000 shares can be purchased). Compare the change in the investor's wealth from buying the stock and buying the options if the stock price at the expiration of the option is: a $35. b $24. Using the Black-Scholes formulation, compute the value of an option that expires in one year (T = 1) if the following facts apply. S = $45 stock price now K = $40 exercise price r = 1.20 (r = 0.20) o? = 0.0225 o = 0.15 8