The prices of options on Starbucks stock are from October 1, 2019. The expiration date of all these options is November 15, 2019. (T = 6 weeks) The 6-week risk-free rate was 1.89% (annualized). Starbucks ' stock price was $86.78 on October 1, 2019. Use the standard Black-Scholes Model:

1. Report implied volatilities of the put with strike price = $90. 2. Plot the implied volatility versus the strike price for the call options. Is this consistent with the Black-Scholes equation

Data Below:

-T = - C = S [N(d1)] Xe-T [N(d2)] P = Xer" [1 N(d2)) - S[1 N(d1)] T N] )] In () + (r +202) 7 di OVT d2 = d - OVT = Data on 10/1/2019 Expiration Date Strike Price 11/15/2019 80 11/15/2019 82.5 11/15/2019 85 11/15/2019 87.5 11/15/2019 90 11/15/2019 92.5 11/15/2019 95 11/15/2019 97.5 11/15/2019 100 Call Option 8.77 6.74 5 3.22 2.06 1.18 0.64 0.33 0.15 Put Option 1.12 1.7 2.46 3.47 4.8 6.44 8.55 10.49 12.61 -T = - C = S [N(d1)] Xe-T [N(d2)] P = Xer" [1 N(d2)) - S[1 N(d1)] T N] )] In () + (r +202) 7 di OVT d2 = d - OVT = Data on 10/1/2019 Expiration Date Strike Price 11/15/2019 80 11/15/2019 82.5 11/15/2019 85 11/15/2019 87.5 11/15/2019 90 11/15/2019 92.5 11/15/2019 95 11/15/2019 97.5 11/15/2019 100 Call Option 8.77 6.74 5 3.22 2.06 1.18 0.64 0.33 0.15 Put Option 1.12 1.7 2.46 3.47 4.8 6.44 8.55 10.49 12.61