Question 1 (1.5 points)

You have the following data on a call option: t = 0.75 years; S0 = $ 80; K = $ 80; r = 3% per year; = 2% per year. Determine N (d2). (NB: Round off to two digits after the decimal point, to the nearest even number, before using the normal distribution table available on CLIC).

Options for question 1:

0.96

2.46

0.88

1.70

1.28

Question 2 (0.5 points)

Supporters of the low dividend preference theory claim that investors prefer little or no dividends for tax reasons.

Options for question 2

True

False