1. Concord's stock is currently selling for $40.00 a share but is expected to decrease to either $36 or $44 a share over the next year. The risk-free rate is 3 percent. What is the current value of a 1-year call option with an exercise price of $40?
$0.98
$1.73
$2.52
$0.56
$3.10
2. The 1-year $45 options on Logan stock are priced at $2.51 for the call and $1.58 for the put. The annual risk-free rate is 2.0 percent. What is the per share price of the underlying stock?
$45.05
$38.27
$44.03
$50.18
$54.72