Question: Ex 6 : Consider a stock currently priced at $ 8 5 . In the next period, the stock can either increase by 3 0

Ex 6: Consider a stock currently priced at $85. In the next period, the stock can either increase by 30 percent or decrease by 20 percent. Assume a call option with an exercise price of $80 and a risk-free rate of 6.5 percent.
a. What is the current value of option?
b. Suppose the call option is currently trading at $14. This option is being priced overvalued or undervalued by investors?
c. If the option is mispriced, what amount of riskless return can be earned using a riskless hedge?
Requirements: working in excel file

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