1. The current price of a stock is $48, the annual risk-free rate is 5%, and a 1-year call option with a strike price of $62 sells for $7.3. What is the value of a put option, assuming the same strike price and expiration date as for the call option?
2. Suppose you believe that Basso Inc.'s stock price is going to increase from its current level of $19 sometime during the next 6 months. You can buy a 6-month call option giving you the right to buy 1 share at a price of $32 per share. If Basso's stock price actually rises to $43, what would the exercise value be?