Angus Beef Corp. currently trades at 100 in the market. Calls and puts on Angus Beef are available with an exercise price of 104, The options expire in 240 days and the volatility is estimated as 0.4 (40% per year). Assume the continuous-time risk-free rate is 1% per year.

(a) Compute and explain the values of European call and put options using the BSM model. Assume there are no dividends for Angus Beef. Note that you would need to explain the components/numbers of the BSM formula in more details for the options of Angus Beef.