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Use Black Scholes Model to solve! 2. A non-dividend paying stock has a current price of 125. The stocks volatility is 40% and the continuously

Use Black Scholes Model to solve! 2. A non-dividend paying stock has a current price of 125. The stocks volatility is 40% and the continuously compounded risk-free interest rate is 5%.

a) Calculate the price of a 1-year at the money strike cash-or nothing call paying $100. Graph the payoff.

b) Calculate the price of a 1-year at the money strike asset-or nothing call. Graph the payoff.

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