Question

The price of Tara, Inc., stock will be either $50 or $70 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 5 percent.
a. Suppose the current price of Tara stock is $62. What is the value of the call option if the exercise price is $35 per share?
b. Suppose the exercise price is $60 in part (a). What is the value of the call option now?



$1.99
Sales0
Views118
Comments0
  • CreatedAugust 28, 2014
  • Files Included
Post your question
5000