1. Katrina is analyzing an expansion project for a new business and has developed this input for a Black-Scholes model. Stock price = $4,186,300; Exercise price = $7,250,000; time period = 4 years; standard deviation = 13.8 percent, and the continuously compounded interest rate = 3.84 percent. What is the value of d2 as it is used in the model? .01338 1.2784 1.2953 –1.0293 –1.5713

2. The futures contracts on silver are quoted in dollars per troy ounce with a contract size of 5,000 troy ounces. Contract quotes for the day included an open value of 16.650, a high of 16.660, a low of 16.620, and a settle of 16.645. If you purchased three contracts at the closing price what was the dollar cost of your purchase ignoring all transaction costs? $83,225 $249,675 $249,750 $83,250 $82,500