QUESTION 3. (4 points) CISCO CEO has 15 million shares of stocks and 10 million shares of options (or CISCO). The stock retum volatility (m) is 0.495, dividend yield (d) is 0.0, riskfree rate (t) is 0.01, and maturity (T) is 18 years. Following table shows stock price of CISCO during 2015 Date Jan. Mar Apr May. Jun Jul Aug Sep Oct Nov. Dec. Price $26.4 S29.5 S27.5 $23.8 $18.2 $22.4 $28,4 $25.8 $31.2 $32.9 $27.2 $27.1 For Questions 3-1 through 3-4, suppose that options were granted out-of-money by $1 in May 2015 3-1. Find option's delta as of December 2015? Feb. 3-2. Find increase in CEO wealth for SI increase in CISCO's stock price as of December 2015. 3.3. Suppose that CISCO announced that the options granted to the CEO in May 2015 were actually granted out of money by ST in September 2015. How much in terms of dollar amount) did the CEO gain by misreporting the option granting date by 4 months? QUESTION 3. (4 points) CISCO CEO has 15 million shares of stocks and 10 million shares of options (or CISCO). The stock retum volatility (m) is 0.495, dividend yield (d) is 0.0, riskfree rate (t) is 0.01, and maturity (T) is 18 years. Following table shows stock price of CISCO during 2015 Date Jan. Mar Apr May. Jun Jul Aug Sep Oct Nov. Dec. Price $26.4 S29.5 S27.5 $23.8 $18.2 $22.4 $28,4 $25.8 $31.2 $32.9 $27.2 $27.1 For Questions 3-1 through 3-4, suppose that options were granted out-of-money by $1 in May 2015 3-1. Find option's delta as of December 2015? Feb. 3-2. Find increase in CEO wealth for SI increase in CISCO's stock price as of December 2015. 3.3. Suppose that CISCO announced that the options granted to the CEO in May 2015 were actually granted out of money by ST in September 2015. How much in terms of dollar amount) did the CEO gain by misreporting the option granting date by 4 months