Problem 1. Recall the Black-Scholes formula for the price of a European call option on a non-dividend paying stock is given by Ct = St ~ N(d) e-r(T-t) K ~ N(d2) where - In (*) +(r +0.502)(T t) di = OVT - t and d2 In () + ( 0.502)(T t) OVT-t a) Verify that the BS call option price satisfies the boundary condition. Specifi- cally, show that Ct = max(ST K,0) = Hint: Find out what happens with Ct when t + T. Consider three cases: St > K, ST