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Harper Company stock currently sells for $14 per share and is expected to be worth either $10, $16, or $25 in 1 year. The current

Harper Company stock currently sells for $14 per share and is expected to be worth either $10, $16, or $25 in 1 year. The current risk-free rate is 0.125. A 1-year call with an exercise price of $15 currently sells for $3.

a. What would be the value of a 1-year call with an exercise price of $9?

b. What are the synthetic probabilities in this economy?

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