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The price of Kimchi, Inc., stock will be either $75 or $95 at the end of the year. Call options are available with one year
The price of Kimchi, Inc., stock will be either $75 or $95 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 5 percent. a. Suppose that the current price of the company's stock is $84 What is the value of the call option if the exercise price is $71 per share? (3 points) b. Suppose that the current price of the company's stock is $84 What is the value of the call option if the exercise price is $80 per share? (7 points)
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