In April $2017,$ Facebook's stock price was about $$145.$ An eight$-$month call

on the stock, with an exercise price of $$145,$ sold for $$10\mathrm{.}18.$ The risk$-$free

interest rate was $1\%$ a year. How much would you be willing to pay for

putting on the Facebook stock with the same maturity and exercise price?

Assume that Facebook options are European options, and Facebook does

not pay a dividend.

$($a$)$ $$8\mathrm{.}22$

$($b$)$ $$9\mathrm{.}78$

$($c$)$ $$9\mathrm{.}22$

$($d$)$ $$10\mathrm{.}78$

Use the Black$-$Scholes formula to find the value of the following call option:

Time to expiration one year; Standard deviation $40\%$ a year; Exercise price

$$50$; Stock price $$50$; Interest rate $($effective annual yield$)4\%.$

$($a$)$ $$8\mathrm{.}27$

$($b$)$ $$8\mathrm{.}77$

$($c$)$ $$8\mathrm{.}55$

$($d$)$ $$8\mathrm{.}97$