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Q3: A) Calculate the price of a three-month European call option with strike price 20 when the current stock price is 23.5. The volatility is

Q3: A) Calculate the price of a three-month European call option with strike price 20 when the current stock price is 23.5. The volatility is 30% and risk-free interest rate is 2% p.a. Q3: B) Assume that 8(t), the force of interest per unit time at time t is given by 8(t) = a + t2. Find formulae for the accumulation of unit investment from time t to time t2 (Ati ,t2 ) )

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