# Question

T-bills currently yield 4.3 percent. Stock in Octagon Manufacturing is currently selling for $55 per share. There is no possibility that the stock will be worth less than $50 per share in one year.

a. What is the value of a call option with a $45 exercise price? What is the intrinsic value?

b. What is the value of a call option with a $35 exercise price? What is the intrinsic value?

c. What is the value of a put option with a $45 exercise price? What is the intrinsic value?

a. What is the value of a call option with a $45 exercise price? What is the intrinsic value?

b. What is the value of a call option with a $35 exercise price? What is the intrinsic value?

c. What is the value of a put option with a $45 exercise price? What is the intrinsic value?

## Answer to relevant Questions

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