By using Black-Scholes Formula,

1. What happens to c and p as volatility (sigma) becomes very large?
2. What happens to c and p as T becomes very large?

  

The Black-Scholes-Merton Formulas (See pages 313-315) -rT c = S N(d) K eT N(d) - N(-d) - S N(-d) p = Ke where d 0 = d2 = In(S/K)+(r+o/2)T 2 In(S /K)+(r0 / 2)T = d-oT