your options are increase or decrease where it says select.

Consider the following data relevant to valuing a European-style call option on a nondividend-paying stock: X = 40, RFR = 9%, T = six months (i.e., 0.5), and = 0.30.

Compute the Black-Scholes option and hedge ratio values for the series of hypothetical current stock price levels shown below. You may use Appendix D to answer the question. Do not round intermediate calculations. Round the Black-Scholes option values to the nearest cent and the hedge ratio values to four decimal places.

Stock Price	Call		Hedge Ratio
$25	$
$30	$
$35	$
$40	$
$45	$
$50	$
$55	$

Determine how your answer in Part a would differ under the following separate circumstances: (1) the time to expiration increases, and (2) the volatility of a nondividend-paying stock increases.

An increase in time to expiration causes a(an) -Select- in the call value. An increase in the volatility causes a(an) -Select- in the call value.

For S = 40, calculate the Black-Scholes value for a European-style put option. How much of this value represents time premium? Do not round intermediate calculations. Round your answers to the nearest cent.

Put value: $

Time premium: $