Use the following information to answer question 5 - 7. Followings are option contracts on Microsoft's stock. The current stock price of Microsoft is $258.52/share. Expiration date: 7/30/2021 Call (price) Strike Price Put (price) 11.85 MSFT 252.00 5.65 MSFT 265.00 11.65 5. The price of the MSFT 265.00 call option should be $11.85. A. Equal to. B. Greater than C. Less than D. Not enough information to determine. 6. Microsoft is a dividend paying company. Over the past one and half years, Microsoft's profit has increased dramatically. Many analysts believe that Microsoft would increase its dividends for the second quarter of this year. If Microsoft does increase its dividend, the price of the MSFT 252.00 put option should A. Decrease. B. Increase. C. Not be affected by the changes in dividends. D. Not enough information to determine. 7. If the option contracts are American options, the price of November 2021 MSFT 265.00 put option should be $11.65. A. Equal to B. Greater than C. Less than D. Not enough information to determine. 8. Regarding to early exercising of American options, which of the following is incorrect? A. Call options on non-dividend paying stock should never be exercising early. B. One might want to exercise call options one week after ex-dividend date to avoid the chaotic price fluctuations of the underlying assets. C. One might want to exercise put options early even if the underlying assets do not pay dividend because we could earn some interests on the sales proceeds. D. One might want to exercise put options early if the put options intrinsic is higher than the present value of future option prices. 9. The implied volatility of an option is the volatility A. Calculated from a binomial tree of the option. B. Calculated using the historical prices of the option. For which the Black-Scholes-Merton price equals the market price. D. For which the put-call parity holds under various strike prices. C