Question: Problem 1 -Assume: CLW Inc. *does not pay dividends. *The standard deviation of CLW is 45 % per year. *The risk-free rate is 5%. *CLW

Problem 1 -Assume: CLW Inc. *does not pay dividends. *The standard
deviation of CLW is 45 % per year. *The risk-free rate is

Problem 1 -Assume: CLW Inc. *does not pay dividends. *The standard deviation of CLW is 45 % per year. *The risk-free rate is 5%. *CLW stock has a current price of $24. Using the Black-Scholes formula, what is the price for a 1/2 year American call option on CLW with a strike price of $30? Problem 2 -Assume: *CLW Inc. does not pay dividends. *The standard deviation of CLW is 45% per year. *The risk-free rate is 5%. *CLW stock has a current price of $24. Using the Black-Scholes formula, what is the price for a 1/2 year American put option on CLW with a strike price of $30? Problem 3 FPA, Inc. has a current stock price of $42.40 per share. The company will pay an annual dividend yield of 6% on its stock. If FPA's returns have a standard deviation of 25% and the risk-free rate is 4%, what is the value of a one-year call option on the stock with a strike price of $40

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