The arbitrageur should short a certain number of ounces of gold today and short forward contracts on the same number of ounces of gold for delivery in one year. Question 8 (1 point) For a call option using Black-Scholes-Merton model adjusted for cash flows: the underlying is priced at 225; the exercise price is 200; the continuous compounded risk-free rate is 5.25 per cent; the time to expiry is 3 years; and the volatility is 0.15 (15%). The present value of cash flows over the life of the option is 19.72. Calculate the value of d1 in the model. 0.5766 0.7995 0.7190 0.8364 Question 9 (1 point) Saved Agnes advises clients on option strategies related to interest rates and bonds. She institutes a hedge of a $5 million position in bonds using calls. The calls each cover