Solved: The stock will be either 68 or 90 at the end of the year, Business Economics

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The stock will be either 68 or 90 at the end of the year

The stock will be either $68 or $90 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 6 percent.

a. Suppose the current price of the company's stock is $79. What is the value of the call option if the exercise price is $64 per share? (32.16.)

Call value $

b. Suppose the current price of the company's stock is $79. What is the value of the call option if the exercise price is $74 per share? (32.16.)

Call value $

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Business Economics: The stock will be either 68 or 90 at the end of the year

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Business Economics: The stock will be either 68 or 90 at the end of the year

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