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1) The market price of a European call is $2.20 and its price given by Black-Scholes-Merton model with a volatility of 27% is $2.40. The

1) The market price of a European call is $2.20 and its price given by Black-Scholes-Merton model with a volatility of 27% is $2.40. The price given by this Black-Scholes-Merton model for a European put option with the same strike price and time to maturity is $1.30. What should the market price of the put option be? Explain

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