• 2. Audrey is considering an investment in Morgan Communications, whose stock currently sells for $60. A put option on Morgan’s stock, with an exercise price of $55, has a market value of $3.06. Meanwhile, a call option on the stock with the same exercise price and time to maturity has a market value of $9.29. The market believes that at the expiration of the options, the stock price will be $70 or $50 with equal probability. a. What is the premium associated with the put option? the call option? b. If Morgan’s stock price increases to $70, what would be the return to an investor who bought a share of the stock? if the investor bought a call option on the stock? if the investor bought a put option on the stock? c. If Morgan’s stock price decreases to $50, what would be the return to an investor who bought a share of the stock? if the investor bought a call option on the stock? if the investor bought a put option on the stock?