1)

A stock is currently selling for $43. In one period, the stock will move up by a factor of 1.26 or down by a factor of 0.59. A call option with a strike price of $53 is available. If the risk-free rate of interest is 2.5 percent for this period, what is the value of the call option? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Call option

$

2)

A stock is currently priced at $42 and will move up by a factor or 1.23 or down by a factor of 0.91 each period over each of the next two periods. The risk-free rate of interest is 3 percent. Calculate the value of a put by solving for the value of a call and then using put-call parity. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Put option

$

3)

What is the value of a call option if the underlying stock price is $71, the strike price is $60, the underlying stock volatility is 31 percent, and the risk-free rate is 5.4 percent? Assume the option has 144 days to expiration. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Call option

$