1.Consider an option on a non-dividend-paying stock when the stock price is $30, the exercise price is $29, the risk-free interest rate is 5% per annum, the volatility is 25% per annum, and the time to maturity is four months. (10 points)

N(0.3225)=	0.626469		N(0.1782)=	0.570708
N(-0.3225)=	0.373531		N(-0.1782)=	0.429292
N(0.4225)=	0.663676		N(0.2782)=	0.609562
N(-0.4225)=	0.336324		N(-0.2782)=	0.390438
N(0.5225)=	0.699344		N(0.3782)=	0.647351
N(-0.5225)=	0.300656		N(-0.3782)=	0.352649

a.What is the price of the option if it is a European call? (4 points)

b.What is the price of the option if it is an American call? (2 points)

c.What is the price of the option if it is a European put? (2 points)

Verify that putcall parity holds. (2 points)