Question
The price of Chive Corp. stock will be either $67 or $91 at the end of...
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The price of Chive Corp. stock will be either $67 or $91 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 company’s stock is $75. What is the value of the call option if the exercise price is $70 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 company’s stock is $75. What is the value of the call option if the exercise price is $80 per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. call value b. call value |
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