Suppose the current price of the companys stock is 79 what


The stock will be either $68 or $90 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 6 percent.

a. Suppose the current price of the company's stock is $79. What is the value of the call option if the exercise price is $64 per share? (32.16.)

Call value $  

b. Suppose the current price of the company's stock is $79. What is the value of the call option if the exercise price is $74 per share? (32.16.)

Call value $

Solution Preview :

Prepared by a verified Expert
Finance Basics: Suppose the current price of the companys stock is 79 what
Reference No:- TGS02874754

Now Priced at $10 (50% Discount)

Recommended (92%)

Rated (4.4/5)