1. Google's stock price is trading at $530. Imagine that googles stock price will either rise by 33.3%, or fall by 25% over the next six months. Recalculate the call option (exercise price $530) using a) the replicating portfolio method and b) the risk-neutral method.
2. Henry Corp. bonds were issued 12 years ago and carry a 10% coupon rate. These bonds have 8 years until they mature. Find the intrinsic value of these bonds if the yield to maturity is 7%. Round your answer to two decimals.