Using the information in Problem 19‐6, decide intuitively whether the put or the call will sell at a higher price, and verify your answer.

Problem 19‐6

Determine the value of Ribex call options that are $2 out of the money and have an exercise price of $40, a time to expiration of 90 days, the interest rate is 10 percent, and the variance of return on the stock is 0.81.