Suppose that you just joined the Kuala Lumpur office of the Standard Chartered Bank. On your first day on the job, you have been asked to value a European option on a stock. The stock is currently trading at 60.00 ringgits per share. The 4-month nominal risk-free ringgit interest rate is 6.5%. Your colleague, who was previously working in the stock, has estimated the weekly return volatility (i.e., the volatility based on weekly return) to be 3.1%.

(a) Find the value of a 4-month European call option on the stock with strike or exercise price equal to 55 ringgits.

(b) Find the value of a 8-month European call option on the stock with strike or exercise price equal to 55 ringgits.