Part 3.

Calculate the value of a European call option using the Black-Scholes Model. The underlying stock has a cash price of $175, the long-term volatility measured as the stocks standard deviation of returns is 5.5%, the calls strike price is $180, and the risk-free interest rate is 5%. The call option has a maturity of 3 months.

Part 4.

Use the put-call parity to calculate the put option with the same strike price, maturity, and underlaying asset as the call option in Part 3 above.