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The price of Tara, Inc., stock will be either $73 or $95 at the end of the year. Call options are available with one year
The price of Tara, Inc., stock will be either $73 or $95 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 company's stock is $84. What is the value of the call option if the exercise price is $69 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Call value 17.65 b. Suppose the current price of the company's stock is $84. What is the value of the call option if the exercise price is $79 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Call value
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