1 The following price quotations are for exchange-listed options on Primo Corporation common stock. Company Primo 61.12 Strike 56 Expiration Feb Call 7.26 Put 0.49 nts With transaction costs ignored, how much would a buyer have to pay for one call option contract. Assume each contract is for 100 shares. eBook Amount for one call option Print Suppose there are two independent economic factors, Mand M2. The risk-free rate is 7%, and all stocks have independent firm- specific components with a standard deviation of 51%. Portfolios A and B are both well diversified. Portfolio A B Beta on M 1.6 2.3 Beta on M2 2.4 Expected Return (8) 30 11 -0.7 What is the expected return-beta relationship in this economy? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Answer is complete but not entirely correct. 7.00 % Expected return-beta relationship E(TP) = 3.88 X BP1 + 7.00 BP2