The price of Cartman Corp. stock will be either ($75) or ($95) at the end of the

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The price of Cartman Corp. stock will be either $$75$ or $$95$ at the end of the year. Call options are available with one year to expiration. T-bills currently yield 4 percent.

a. Suppose the current price of Cartman stock is $$90.$ What is the value of the call option if the exercise price is $$70$ per share?

b. Suppose the exercise price is $$90$ in part (a). What is the value of the call option now?

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