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the question is in Bold / A stock selling for $25 today will, in 1 year, be worth either $35 or $20. If the interest

the question is in Bold /

A stock selling for $25 today will, in 1 year, be worth either $35 or $20. If the interest rate is 8%, what is the value today of a one-year call option on the stock with an exercise price of $30?

Under the given assumptions, the sum of the call and put prices is $2.16+$4.94=$7.10. Suppose, ceteris paribus, that the stock will be worth either $45 or $15 in one year.* What is the sum of the call and put options then?

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