The current price of a stock is $294 and the annual standard deviation of the rate of return on the stock is 20%. The stock is expected to pay dividends of $2 in 1 months and $2 in 4 months. An American call option on the stock has a strike price of $350 and expires in 0.5 years. The risk-free rate is 5% (continuously compounded). Attempt 1/5 for 10 pts. Part 1 What should you do with the option? O Exercise it just before the second ex-dividend date O Exercise it just before the first ex-dividend date O Exercise it now O Wait until the expiration date Submit Part 2 8 Attempt 1/10 for 10 pts. What is the present value of the dividends? 2+ decimals Submit B Attempt 1/10 for 10 pts. Part 3 What is the value of N(d) in the Black-Scholes formula? Use Excel's NORM.S.DIST(d1, true) function. 3+ decimals Submit IB Attempt 1/10 for 10 pts. Part 4 What is the value of N(d)? 3+ decimals Submit Part 5 IB Attempt 1/10 for 10 pts. What should be the price (premium) of the call option? The current price of a stock is $294 and the annual standard deviation of the rate of return on the stock is 20%. The stock is expected to pay dividends of $2 in 1 months and $2 in 4 months. An American call option on the stock has a strike price of $350 and expires in 0.5 years. The risk-free rate is 5% (continuously compounded). Attempt 1/5 for 10 pts. Part 1 What should you do with the option? O Exercise it just before the second ex-dividend date O Exercise it just before the first ex-dividend date O Exercise it now O Wait until the expiration date Submit Part 2 8 Attempt 1/10 for 10 pts. What is the present value of the dividends? 2+ decimals Submit B Attempt 1/10 for 10 pts. Part 3 What is the value of N(d) in the Black-Scholes formula? Use Excel's NORM.S.DIST(d1, true) function. 3+ decimals Submit IB Attempt 1/10 for 10 pts. Part 4 What is the value of N(d)? 3+ decimals Submit Part 5 IB Attempt 1/10 for 10 pts. What should be the price (premium) of the call option