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Open Ended Questions (Show Calculations to Get Any Credit) Q2 The following information is given about options on the stock of a certain company. (50

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Open Ended Questions (Show Calculations to Get Any Credit) Q2 The following information is given about options on the stock of a certain company. (50 points) So = 30 Ic - 0.09 62 -0.45 X - 29 T-0.75 No dividends are expected. Answer the following questions: What value does the Black-Scholes-Merton model predict for the call? (20 points) a. b. Suppose you feel that the call is overpriced. What strategy should you use to exploit the apparent misvaluation? (5 points)

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