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The price of Profile, Inc., stock will be either $79 or $101 at the end of the year. Call options are available with one year
The price of Profile, Inc., stock will be either $79 or $101 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 4 percent. |
a. | Suppose the current price of the stock is $90. What is the value of the call option if the exercise price is $75 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
b. | Suppose the current price of the stock is $90. What is the value of the call option if the exercise price is $85 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
a. Call Value ??
b. Call Value ??
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