European stock option

Using the results of this chapter, simulate the value of a European stock option struck at $10, initial stock price $8, as if the stock price grew at the risk-free rate r = 3%, with volatility σ = 20%. Do this for options expiring at T = 1, 2, 3, and 10 years. How many simulations do you need to get an accurate answer for each year? Check your answer against the Black Scholes formula result (see Chapter 23).