(Binomial Model) IMP Enterprises current stock price is $70 per share. Call options for this stock exist that permit the holder to purchase one share at an exercise price of $80. These options will expire at the end of 1 year, at which time IMP's stock will be selling at one of two prices, $44 or $116. The risk-free rate is 10%. As an assistant to the firm's CFO, you have been asked to perform the following tasks to arrive at the value of the firm's call options. Answer to the following questions.

Q1. Find the range of values for the ending stock price and the call option at the option's expiration in 1 year. Create a riskless hedged investment by equalizing the range of payoffs for the stock and the option.

Q2.

What is the present value of the riskless portfolio? What is the value of the firm's call option?