The common shares of Twitter, Incorporated $($TWTR$)$ recently traded on the NYSE for $$69$ per share. You have

employee stock options to purchase $1,000$ TWTR shares for $$74$ per share. The options expire in three years.

Assume that the annualized volatility of TWTR stock is $59$ percent and that the interest rate is $2\mathrm{.}7$ percent.

$($Assume the options are European options that may only be exercised at the maturity date.$)$

a$.$ Is this option a call or a put?

Call $o.$

Put

b$.$ Using an option pricing calculator such as the one at

erieri.com$/$blackscholes$,$ estimate the value of your

TWTR options.

Note: Round your intermediate calculations to $2$ decimal places and final answer to nearest whole

dollar.

Answer is complete but not entirely correct.

c$.$ What is the estimated value of the options if their maturity is six months instead of three years?

Note: Round your intermediate calculations to $2$ decimal places and final answer to nearest whole

dollar.

Answer is complete but not entirely correct.

d$.$ What is the estimated value of the options if their maturity is three years, but TWTR$\text{'}$s volatility is $34$

percent?

Note: Round your intermediate calculations to $2$ decimal places and final answer to nearest whole

dollar.

Answer is complete but not entirely correct.