Answer each question, pls TYPE answers showing the calculation processes, not taking a picture of handwriting.

1. Using the Black-Scholes options pricing model. Calculate the call option premium on a stock with an exercise price of $105, which expires in 90 days. The stock is currently trading for $100 and the monthly standard deviation on the stock return is 3%. The annual risk-free rate is 4% per year.

2. Explain why it may be better (add value) for a firm to implement risk management strategies rather than have shareholders do it for themselves.