Question: PROBLEM 1 (4 points: Use the Black-Scholes pricing method to calculate the premium for a call option for the following conditions: s-60, K-64, r-506, t-25,

PROBLEM 1 (4 points: Use the Black-Scholes pricing method to calculate

PROBLEM 1 (4 points: Use the Black-Scholes pricing method to calculate the premium for a call option for the following conditions: s-60, K-64, r-506, t-25, 2-0.2 (Notice that these are the same stock price, strike price, and interest rate values used in Problem Set 8.) A. Show your values for di d,, and C. The cumulative normal table is provided on the last page of this problem set. [Hint: What does it mean when z-values are negative?] (3 points)

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