ABC stock currently trades for $70/share. You expect the stock could move by 50% in either direction over the next six months. The annual risk free rate is 2%. 6-month call options on ABC have an exercise price of $80/share. Find the probability that the stock increases over time. Round intermediate steps to four decimals.

		.4899
		.8838
		.1162
		.5101

Find the value of the call today. Round intermediate steps to four decimals and your final answer to two decimals.

		21.88
		2.88
		12.13
		12.63

Based on the information in the previous questions, an investor that owns 100 shares of ABC stock can hedge their position by purchasing approximately 2.8 call options.

True

False