Suppose the current value of a popular stock index is 650.00 and the dividend yield on the index is 3.1%. Also, the yield curve is flat at a continuously compounded rate of 5.0%.

1. If you estimate the volatility factor for the index to be 17%, use the Black-Scholes model to calculate the value of an index call option with an exercise price of 663 and an expiration date in exactly three months. You may use Appendix D to answer the question. Do not round intermediate calculations. Round your answer to the nearest cent.

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2. If the actual market price of this option is $18.90, calculate the implied volatility coefficient. Do not round intermediate calculations. Round your answer to two decimal places.