Question
The price of Profile, Inc., stock will be either $67 or $89 at the end of...
|
The price of Profile, Inc., stock will be either $67 or $89 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 4 percent. |
| a. |
Suppose the current price of the stock is $78. What is the value of the call option if the exercise price is $63 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| b. | Suppose the current price of the stock is $78. What is the value of the call option if the exercise price is $73 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
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