## Computer Projects

1. Using your favorite mathematics computer program, enter the Black-Scholes options pricing model. Enter the parameters for a recently traded, active option to solve for the price. Then vary the five parameters that affect the price. How much does the options price vary as each parameter is varied? How would this affect your options trading system, if you had one?

2. Using your favorite mathematics computer program, enter the Black-Scholes options pricing model. How would you adjust it so that the probability of a price higher than the total of interest and principal to be received is zero? You could lower the variance of the underlying normal distribution so that the tail over the maximum total amount is acceptably low. What would this do to the overall analysis? You could simply lop off the tail of the normal distribution at the maximum total. Where would you put the amount lopped off? What would this do to the overall analysis? What other adjustments could you make to the equation?

## Optimum Options

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