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Suppose a share of stock sells for $65. The risk-free rate is 5 percent, and the stock price in one year will be either $71
Suppose a share of stock sells for $65. The risk-free rate is 5 percent, and the stock price in one year will be either $71 or $81. (Leave no cells blank - be certain to enter "0" wherever required.) a. What is the value of a call option with an exercise price of $71? Call option value $ b. Calculate the minimum return on the stock required to get the option in the money. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Minimum stock return %
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