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1.The current price of a stock is $21. In 1 year, the price will be either $26 or $15. The annual risk-free rate is 7%.

1.The current price of a stock is $21. In 1 year, the price will be either $26 or $15. The annual risk-free rate is 7%. Find the price of a call option on the stock that has a strike price is of $24 and that expires in 1 year. (Hint: Use daily compounding.) Round your answer to the nearest cent. Assume 365-day year. Do not round your intermediate calculations.

2.The current price of a stock is $16. In 6 months, the price will be either $18 or $11. The annual risk-free rate is 3%. Find the price of a call option on the stock that has a strike price of $13 and that expires in 6 months. (Hint: Use daily compounding.) Round your answer to the nearest cent. Assume a 365-day year. Do not round your intermediate calculation

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