Using a spot price of $16, a strike price of $18 and a risk-free rate of 6% and the fact that the volatility of the share price is 18%, answer following questions:

1. What is the price of an eight-month European call? [1 mark]
2. What is the price of an eight-month American call? [1 mark]
3. What is the price of an eight-month European put? [1 mark]
4. How would your result from k. change if a dividend of $1 is expected in three months? How would your result from k. change if a dividend of $1 is expected in ten months? [2 marks]