Stock price = $94

Exercise price = $85

Risk-free rate = 5% per year, compounded continuously

Maturity = 9 months

Standard deviation = 56% per year

Use the information above and the Black-Scholes Option Pricing Model to find:

a) the price of a call

b) the price of a put

c). Use the same information above. Does the call or the put have the larger time value component? Would you expect this to be true in general?