A stock selling for $25 today will, in 1 year, be worth either S35 or $20. If the interest rate is 8%, what is the value today of a one-year call option on the stock with exercise price $30? Use the simultaneous equation approach of section 16.2 to price the option. See Chapter 16 Exercise 1. Use also exercises 16_binomial.xlsm file Exercise 1 and 2 sheet. 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? So = $25 Si = $45 $10