Questiion 1

• A stock is trading at $123.47. Given the following conditions: Strike price of $125.00
• Dividend of $6.48 is to be paid in 56 days
• Dividend of $6.52 is to be paid in 238 days
• Volatility of the stock is 28.76%
• Continuously compound risk free rate is 3.6866%

Determine :

1. Time to expiry of the option is 241 days The present value of the dividends
2. The price of a European call option
3. The price of a European Put option
4. The intrinsic value of the put option
5. The time value of the call option

Question 2

• A stock is trading at $78.95. Given the following conditions: Strike price of $75.00
• Dividend of $3.44 is to be paid in 23 days
• Volatility of the stock is 39.22%
• Continuously compound risk free rate is 4.7866%

Determine

1. Time to expiry of the option is 27 days The present value of the dividends
2. The price of a European call option
3. The price of a European Put option
4. The intrinsic value of the put option
5. The time value of the call option