Q1: Use the following information to answer the next two questions. A stock currently trades for $130 per share. Call options on the stock are available with a strike price of $125. The options expire in 10 days. The annual risk free rate is 3% and the expected standard deviation is 0.35. Find the value of a call option using the Black-Scholes option pricing model (Assume 365 days per year)

A)4.35 B)5.19 C)6.25 D)8.17

Q2: Use the Black-Scholes option pricing model to find the value of a put option written on the same stock that matures in 10 days and has a strike price of $125. (Assume 365 days per year)

A) 1.09 B)1.15 C)0.862 D)0.623