2- a. What is the price of a European put option on a non-dividend-paying stock when the stock price is $69, the strike price is $70, the risk-free interest rate is 5% per annum, the historical volatility is 35% per annum, and the time to maturity is six months?
b. WITHOUT using the B-S-M formula, please calculate the call option price on the same stock with $70 strike price and a time to maturity of 6 months? Explain how and show the process. (Simply showing a number without explanation and process is not a valid answer.)
c. For the same put option, if the actual market trading price is $5, what is the implied volatility? Get Finance homework help today