2. Alright Is All Left, Inc. stock is currently valued at $60 per share. One year from today, the stocks value could be (in increasing order) $40, $X, $Y, each with one-third probability. Janet can buy a European call option with an expiration date one year from today. This option has a present value of $4, and has a one-third probability of having a positive value on the expiration date. The exercise price for this option is $75. The effective annual discount rate for this option is 20%.

(a) (4 points) Can you determine exactly what X can be? Why/why not? If you can determine X, calculate its exact value. If can only determine a range that X can be, determine what that range can be.

(b) (4 points) Can you determine exactly what Y can be? Why/why not? If you can determine Y, calculate its exact value. If can only determine a range that Y can be, determine what that range can be.