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The price of MDD, Inc., stock will be either $75 or $97 at the end of the year. Call options are available with one year
The price of MDD, Inc., stock will be either $75 or $97 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 7 percent. a. Suppose the current price of MDD stock is $86. What is the value of the call option if the exercise price is $71 per share? (Round your answer to 2 decimal places. (e.g., 32.16)) Call value b. Suppose the current price of MDD stock is $86. What is the value of the call option if the exercise price is $81 per share? (Round your answer to 2 decimal places. (e.g., 32.16)) Call value 11.57
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