a$.$ Use the Black$-$Scholes formula to find the value of the following call option. $($Do not round intermediate calculations. Round your

final answer to $2$ decimal places.$)$

i$.$ Time to expiration $1$ year.

ii$.$ Standard deviation $40\%$ per year.

iii. Exercise price $$88.$

iv$.$ Stock price $$88.$

v$.$ Interest rate $4\%($effective annual yield$).$

b$.$ Now recalculate the value of this call option, but use the following parameter values. Each change should be considered

independently. $($Do not round intermediate calculations. Round your final answers to $2$ decimal places.$)$

i$.$ Time to expiration $2$ years.

ii$.$ Standard deviation $50\%$ per year.

iii. Exercise price $$98.$

iv$.$ Stock price $$98.$

v$.$ Interest rate $6\%.$

c$.$ In which case did increasing the value of the input not increase your calculation of option value?