Question 2 (answer all parts of the question) a. The current share price of Ican plc is 2.26 per share. It offers a continuously compounded dividend yield of 2.00% per year. The volatility of its stock returns is 50% and risk free rate is 5%, both per annum with continuous compounding Required (show all step-by-step calculations for each party 1. Using Black-Scholes-Merton (B-S-M) model, find the values of Nid.) and (d) for an option with a strike price of 2.00 and maturity in six months. ii. Determine the price of this call option using B-S-M model i. What would be the cost often call option contracts? [16+ 12+7= 35 marks] b. Put options on Ican pic with a strike price of 200 and maturity in six months are trading at 0.30 per option. Does this offer an arbitrage opportunity? If yes, how can one take advantage of this opportunity? Fully illustrate your answer using 10 option contracts [40 marks]