Alphabet, Inc. (Ticker: GOOG) is currently trading at $1,045 per share and pays no dividends. The volatility of its stock return is 25%. The risk-free rate is 2.50%, the European call option strike price is $1,020, and there are 3 binomial periods. Assume you are trying to value a 1-year option.

10. What is the Black-Scholes European call option price?

11. What is the delta of the European call option?

12. What is the option elasticity of the European call option? Use the Black-Scholes European call option price computed in Question 10.

13. Suppose Alphabet stock increases to $1,080 per share. What is new [estimated] European call option price? Use the Black-Scholes European call option price computed in Question 10.

14. Suppose Alphabets stock price decreases 2%. What is the estimated percent change in the European call option price? Use the option elasticity computed in Question 12.

15. Why are there three different option prices for the same 1-year options contract (Questions 5, 9, and 10). Which call option price is most accurate and why?