1. Find the current fair values of a 11.2 month European call and a 11.2 month European put option, using a current stock price of 32.6, strike price of 32.6, volatility of .62, interest rate of 9.2 percent per year, continuously, compounded. Obtain the current fair values of the following:
1. European call by simulation.
2. European put by simulation.
3. European call by Black-Scholes model.
4. European put by Black-Scholes model.
2. What is the future value of $1,600 in 17 years assuming an interest rate of 10 percent compounded semiannually? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Future value $