1. Suppose ABCD's stock price is currently $50. In the next six months it will either fall to $40 or rise to $80. What is the current value of a six-month call option with an exercise price of $50? The six-month risk-free interest rate is 2 percent (periodic rate).

2.Suppose a stock price can go up by 13.25% or down by 11.25% over the next year. You own a one-year put on the stock. The interest rate is 12%, and the current stock price is $53. a. What exercise price leaves you indifferent between holding the put or exercising it now? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. How does this break-even exercise price change if the interest rate is increased?

please do not use excel, please show work step by step for both . thank you