Question

T-bills currently yield 4.8 percent. Stock in Nina Manufacturing is currently selling for $63 per share. There is no possibility that the stock will be worth less than $61 per share in one year.
a. What is the value of a call option with a $60 exercise price? What is the intrinsic value?
b. What is the value of a call option with a $50 exercise price? What is the intrinsic value?
c. What is the value of a put option with a $60 exercise price? What is the intrinsic value?



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  • CreatedAugust 28, 2014
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