With multiple choice answer please provide explanation!

The next three questions rely on the following equations related to Black-Scholes-Merton option valuation model (BSMOVM): C = N(d) - XBN d.), d =- - OT = -VT, B = P =C.-S.-B. (X) Values for Nid). given d: Rows give first decimal of d and columns give second and third decimals 0.000 0.005 0.040 0.045 0.050 0.055 0.060 -0.5 0.308538 0 306779 0.294599 0.292877 0.291160 0.289447 0.287740 -0.4 0.344578 0.342739 0329969 03281600326355 0324555 0322758 0.382089 0.380183 0.366928 0.365047 0.363169 0.361295 0.359424 0.420740 0.418786 0.405165 0.403228 0.401294 0.3993620397432 -0.1 0460172 045818 0.444330 0.442355 0.440382 0438411 0.436441 -0.0 0.500000 0.498005 0.484047 0.482054 0.480061 0.478069 0.476078 0.0 0.500000 0 501995 0.515953 0.517946 0.519939 0.521931 0523922 0.539828 0.541812 0.555670 0.557845 0559618 0.56 15.89 0563559 0.579260 0.581214 0.594835 0.596772 0.598706 0.600638 0.602568 0.6179110.519817 0.633072 0.6349530.636831 0.638705 0.640576 0.655422 0.657261 0.670031 0.671840 0.673645 0,675445 0.677242 0.691462 0.693221 0.705401 0.707123 0.708840 0.710553 0.712260 03 42 0.5 1. Assume S. = $53, X = $50.1=3.0%, T = 1.5, = 40%, and no dividends. Calculate the Black-Scholes-Merton option valuation model value for the call option? (Due to differences in rounding your calculations may be slightly different. Select the closest answer.) a. 12.05 b. 13.60 c. 12.57 d. 15.10 2. Suppose you believe that the call option is overpriced. What strategy should you use to exploit the apparent error in valuation? (Due to differences in rounding your calculations may be slightly different. Assume one stock per call contract. The reported strategies below ignore the required financing.) a. buy 675 shares, sell 1,000 calls b. buy 520 shares, sell 1,000 calls c. sell short 951 shares, buy 1,000 calls d. sell short 520 shares, buy 1,000 calls 3. The value of a put option on the stock is: (Due to differences in rounding your calculations may be slightly different.) a. 0.95 b. 5.88 c. 8.13 d 7.37 The next three questions rely on the following equations related to Black-Scholes-Merton option valuation model (BSMOVM): C = N(d) - XBN d.), d =- - OT = -VT, B = P =C.-S.-B. (X) Values for Nid). given d: Rows give first decimal of d and columns give second and third decimals 0.000 0.005 0.040 0.045 0.050 0.055 0.060 -0.5 0.308538 0 306779 0.294599 0.292877 0.291160 0.289447 0.287740 -0.4 0.344578 0.342739 0329969 03281600326355 0324555 0322758 0.382089 0.380183 0.366928 0.365047 0.363169 0.361295 0.359424 0.420740 0.418786 0.405165 0.403228 0.401294 0.3993620397432 -0.1 0460172 045818 0.444330 0.442355 0.440382 0438411 0.436441 -0.0 0.500000 0.498005 0.484047 0.482054 0.480061 0.478069 0.476078 0.0 0.500000 0 501995 0.515953 0.517946 0.519939 0.521931 0523922 0.539828 0.541812 0.555670 0.557845 0559618 0.56 15.89 0563559 0.579260 0.581214 0.594835 0.596772 0.598706 0.600638 0.602568 0.6179110.519817 0.633072 0.6349530.636831 0.638705 0.640576 0.655422 0.657261 0.670031 0.671840 0.673645 0,675445 0.677242 0.691462 0.693221 0.705401 0.707123 0.708840 0.710553 0.712260 03 42 0.5 1. Assume S. = $53, X = $50.1=3.0%, T = 1.5, = 40%, and no dividends. Calculate the Black-Scholes-Merton option valuation model value for the call option? (Due to differences in rounding your calculations may be slightly different. Select the closest answer.) a. 12.05 b. 13.60 c. 12.57 d. 15.10 2. Suppose you believe that the call option is overpriced. What strategy should you use to exploit the apparent error in valuation? (Due to differences in rounding your calculations may be slightly different. Assume one stock per call contract. The reported strategies below ignore the required financing.) a. buy 675 shares, sell 1,000 calls b. buy 520 shares, sell 1,000 calls c. sell short 951 shares, buy 1,000 calls d. sell short 520 shares, buy 1,000 calls 3. The value of a put option on the stock is: (Due to differences in rounding your calculations may be slightly different.) a. 0.95 b. 5.88 c. 8.13 d 7.37