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The price of Tara Inc. stock will be either $75 or $95 at the end of the year. Call options are available with one year
The price of Tara Inc. stock will be either $75 or $95 at the end of the year. Call options are available with one year to expiration. T-bils currently yield 6 percent. a. Suppose the current price of Tara stock is $85. What is the value of the call option if the exercise price is $65 per share? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Call value b. Suppose the current price of Tara stock is $85. What is the value of the call option if the exercise price is $70 per share? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Call value
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