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1. The Black-Scholes model is being used to price options on CBE stock. The current price of one share of stock is 1,000.The stock pays

1. The Black-Scholes model is being used to price options on CBE stock. The current price of one share of stock is 1,000.The stock pays dividends of 2%.The stocks volatility is 25%.The interest rate is 6%.

a. Determine the price of a put option on CBE stock with a strike price of 1,080 and three months to expiration. (10 points).

b. Determine the Delta of a call option on CBE stock with a strike price of 1,080 and three months to expiration. (5 points).

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